Recently, a circle of news has aroused heated discussion among people. I believe that when I look back at the end of the year, the importance of this news can definitely be one of the top ten news in the circle of 2021.
"On the evening of January 4, the largest banking regulator in the United States, the Office of the Comptroller of the Currency (OCC) of the U.S. Department of the Treasury issued a document on its official website to allow U.S. banks to use public blockchains and USD stablecoins as the settlement infrastructure in the U.S. financial system. ."
It is said that due to the huge amount of visits, the official website was once paralyzed. Regarding this news, we can make the following three interpretations:
1. The "USD stable currency" referred to in the article refers to a stable currency that has been reviewed and approved by regulatory authorities and accepted its continuous supervision. Mainly include USDC, GUSD, PAX, etc. USDT is not good, and DAI, which is native to the blockchain, is definitely not good.
2. The public blockchain here will most likely not be Ethereum, but a consortium chain with access mechanism. Any user's real name, anti-money laundering, anti-terrorist transmission and other regulations must be met.
3. It can be seen that China and the United States have different ideas about digital currencies. From the CDBC, we can see that we use the top-level design of the central bank more to promote the development of digital currencies from the top down, while the United States is more of a “bottom-up” approach led by major financial institutions. At present, each has its own strengths, and it depends on time to test which is better.
But in any case, the OCC official announcement has completely raised the height of stablecoins to a new level. The biggest hot spot in the blockchain industry in 2021 may be on stable coins. Judging from the fact that dozens of algorithmic stablecoin projects have been launched in the recent fire, we can smell some clues.
So let's list the development context of stablecoins so far, and the development direction currently visible .
01
2013-2017
before the stablecoin era
The foreign friends and the old iron who entered before 2018 should be familiar with this term. Yes, before 2017, stablecoins weren't there at all, and it could be said that there was no sense of existence.
You may be wrong, USDT was released in 2015.
That's right, but you have to know that the rise of USDT started with the support of the three major players in the second half of 2017, and what was before that.
In the pre-stable currency era, Bitcoin was the "media of exchange" for all currencies, and foreign compliant trading platforms have always supported direct recharge and purchase of legal currency.
02
2017-present
, the era of legal currency mortgage stable currency
Tether USD is the full name of USDT, and the Chinese name is TEDA Coin. Tether, the issuer, listed USDT on Bitfinex and Poloniex in 2015. As a stable currency, Tether promises that every USDT has one dollar worth of cash or equivalent to support the value of USDT.
USDT became popular after the three major trading platforms launched USDT and opened USDT trading pairs in the second half of 2017.
In the first half of 2017, USDT only printed more than 10 million, and by the end of 2017, it quickly increased to 1 billion. Now look back at the wave of mad cows at the end of 2017, do you know how it got up? BTC's soaring sky at the end of 2017 has a great relationship with USDT's crazy printing.
USDT has experienced many credit crises in the past few years. Users are mainly worried about whether there is a sufficient 1:1 USD deposit in TEDA Bank and compliance issues, but they have basically gone through it smoothly every time.
Now that it has issued 20 billion US dollars in scale, it will continue to occupy the top spot in the stable currency. From the earliest BTC chain, it has gradually expanded to multiple chains such as ETH, TRX, Algorand, and OMG.
Later, everyone saw business opportunities in the stablecoin market. Major institutions issued their own stablecoins. For a while, various USDX occupied people’s vision, including the current second largest USDC, and later TUSD, PAX, GUSD ...
So far, USDT is undoubtedly the best in the circle. The trading platform supports trading pairs, the scale of issuance, and the number of public chains are huge advantages. In terms of outsourcing, the best one is USDC, which has strict audits and fully complies with supervision...
Last month, USDC's issuer Circle even reached a partnership with Visa. Maybe sometime in 2021, Visa will issue a credit card that allows companies using the credit card to send and receive USDC payments directly.
03
2018-present cryptocurrency
mortgage stable currency era
Cryptocurrency-collateralized stablecoins are basically DAI alone. Although there are many other projects that try to copy or improve MakerDAO, so far, it can be said that there is no project that has even the slightest threat to DAI. USDX is far from the threat of USDT.
In the field of cryptocurrency mortgaged stablecoins, if you understand DAI, you basically understand all stablecoins of this type.
It is completely different from the style of currency backed by a centralized institution such as USDX and the U.S. dollar. DAI is basically supported by ETH (now DAI can have multiple encrypted collaterals, including BAT, OMG, etc., for simplicity, we use The first single mortgage ETH will be introduced).
Maker relies on the game of ETH mortgage and arbitrageur to achieve relatively stable prices. For example, for an ETH1000 USD, you pledged 1ETH and opened a CDP (Debt Mortgage Position) and then received 700DAI. If you want to get back your 1ETH in the future, you will have to repay 700DAI.
If the price of DAI drops to US$0.9, the CDP owner can buy 700 DAI at a price of US$630 to repay the loan and make a net profit of US$70. If the price of DAI rises to US$1.1, then the user can directly sell 700 DAI in his hand for 770 US dollars, the same profit is 70 US dollars.
However, DAI has several problems:
1. The capital utilization rate is not high. Because the anchor is ETH instead of US dollars, and the price of ETH itself fluctuates greatly, it can only be over-collateralized, resulting in a capital utilization rate of only about 60-70%, which limits the capital utilization rate. This is also the birth of Lien and others to improve capital utilization The direct cause of the rate of stablecoin projects.
2. The arbitrageur game model mentioned above is actually not always so effective because of the existence of overcollateralization. Because USDT maps the US dollar 1:1, the arbitrageur game model can work perfectly, which is why the fluctuation of DAI is much greater than that of USDT. The expansion of this topic is completely the length of a whole article, so I have covered it in one stroke.
3. When ETH plummets, the clearing system is affected by the current ETH performance, which is prone to problems. 312 In that time, the price of Black Swan ETH plummeted instantly, which led to many cases of winning bids for 0 yuan in the liquidation. As a result, the Maker system had bad debts, and the gap was more than 500 W. Later, Makerdao had to issue additional MKR to repay the debts.
Due to the existence of these several reasons, although DAI is absolutely No.1 in the cryptocurrency mortgage stable currency, it is also difficult to expand. In a few years, there is only a total issuance of several billions of dollars, which is similar to that of USDT. Ten billion stablecoins still have an order of magnitude gap.
04
2020-present
algorithmic stablecoin era
Regarding this track, it has almost entered the second half. For the summary of the first half, please look back at the article a month ago, "In the never-ending rapid evolution of DeFi, the skyrocketing algorithmic stablecoin is just a carnival for a few people? " .
In this more than a month, Basis, the leader in the third-generation algorithmic stablecoin, has appeared dozens of imitation disks, and has been extended to the Huobi Public Chain, TRX, and Binance Smart Chain, which shows how popular it is. So I will follow the previous article here and write about where the algorithmic stablecoin is currently.
Vernacular Blockchain Note: The following mentioned algorithmic stablecoin projects are examples and do not make any suggestions. The risks are relatively high at present, so do not blindly follow the trend.
1. Three generations: Basis, Mith, Onecash
Among Basis and dozens of imitation discs, these three are the most worthy of writing.
Basis: Three generations of originals. After experiencing explosive growth, they have reached a market value of nearly 100 million. They have come underwater in recent days (underwater means BAC<1 USD) and have begun to withstand the test of the "death spiral". Tens of millions of debts, even if they are out of the water (when they come to the water, that is, BAC>1 U.S. dollars), they are likely to be brought back underwater quickly.
However, as an original, Basis is still the most promising of the three generations, because the world of blockchain has rich rewards for the first original on any track. If the three generations of algorithmic stablecoins are falsified as a whole, then Basis should be the last one to fall.
Mith: Basis high imitation, without any changes, pure high imitation. At the beginning, the text on many pages was still BAS, but it was found and posted by sharp-eyed users, which became a joke for the entire network.
However, the creator is Huang Licheng, the creator of Mithril coins, and he is called Big Brother Ma Ji, and the insider is called "Lao Huang". He has strong funds and extensive contacts in the circle. Mith basically relies on his big brother and a few big funds like SBF. Directly supported, the market value is close to Basis , and the three generations who do their part are ranked second. Recently, like Basis, they are also undergoing underwater tests.
Onecash: Basis has the most original projects in many imitations, including Rebase's 10% limit, Boardroom's new LP pool, and the original liquidity design of the bond system, which has effectively improved many defects in the original design of Basis.
Because of the 10% additional issuance design, the market value has grown slowly, and it is still only more than 1 million. It is currently one of the few Basis imitation projects that remain on the water.
2. The fourth generation (that is, part of the mortgage algorithm stable currency): Frax, XUSD
Frax : Similar to Token, it is also a three-currency model, FRAX (stable currency), FXS-Frax Shares (governance and value accumulation Token), Frax Bonds (debt financing Token).
The difference is that without Rebase, Frax initially pledged 100% of USDC to mint and generate. As time goes by, part of USDC + part of FraxShares (FXS will be destroyed) x Share will be used when casting Frax. Finally, It is completely generated by Frax Share mortgage, completing the transition to a pure algorithmic stable currency.
The way to maintain the stability of Token price is similar to that of DAI. It is through the difference between the price and $1, and the arbitrageur fills in the price difference. I won’t elaborate on it here.
XUSD : Frax imitation disk, the difference is that it is Fair Launch, unlike Frax has private equity
3. Five generations: StableCredit? A new project from the first four generations of Yu Dacheng?
AC recently made a comeback, and then announced a Wyfi, leading to the direct price of YFI.
To put it simply, the StableCredit loan + stable currency that AC wants to do is a combination of "Everything can be MakerDao + part of the mortgage stable currency. What's amazing is that everything can be mortgaged like MakerDao to obtain stable currency.
At the same time, these collateralized Tokens will enter the AMM pool to form a "various Token: StableCreditUSD" loan pool, which opens up the interoperability of swap and borrowing assets, unlike the current assets in different projects such as Uniswap and AAVE. The problem of severe fragmentation, capital efficiency has always been one of AC's most concern.
At the same time, Wyfi was introduced, similar to Frax Share in Frax. Not only can you get 50% of the profit of the stable currency in the entire system, but you can also burn Wyfi to cast StableCreditUSD when the price of StableCredit USD is greater than $1, thereby arbitrage and stabilize the price of StableCredit USD.
WYFI is generated by YFI1:1000 and is irreversible, so it is a deflationary benefit for YFI. In other words, is it possible that a project will appear in the market in the future that will combine all the features of the previous stablecoins?
For example, it also supports USDC static mortgage, ETH dynamic mortgage + elastic Rebase, just like USDC+MakerDAO+Basis. If there is such a project, whether you participate or not, I think it’s always right to understand it the first time.
What do you think about stablecoins? Who do you think will pick the holy grail of stablecoins in the crypto world in the future?Welcome to write down your opinion in the message area.
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"Disclaimer: This article is the author's independent point of view, and does not represent the vernacular blockchain position. This content is only for the popular science learning and exchanges of encryption enthusiasts, and does not constitute investment opinions or suggestions. Please treat it rationally, establish a correct concept, and increase risk awareness. The copyright of the article and the final interpretation right belong to the vernacular blockchain. 』
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