It is well known in the field of currency in encryption, USDT is one of the most widely perceived to be a stable currency, USDT is Tether company endorsement issued to anchor the dollar as a stable basis, to a certain extent, Tether as an organized institution The company, USDT can be said to be technically decentralized, but it is not decentralized in terms of additional circulation and deflation. Tether's additional stable currency issuance model is that for every additional 1 USDT , it corresponds to the deposit of 1 USD in the Reserve Bank . However, the number of USD deposits in the Reserve Bank has never been disclosed, and the purchase of cryptocurrencies in the secondary market needs to be purchased through USDT . The formation of " USDT liquidity linked to the floating exchange rate of cryptocurrency ", in other words, USDT has price instability, and there is a risk of centralization of additional issuance. Tether by controlling USDT issuance or deflation, which in turn controls the price of the entire encryption currency market trends. Due to the benefits of this joint relationship, many new stablecoins have emerged : TUSD , GUSD , USC , PAX , CK.USD , BitCNYWait, we will compete for market dividends together. These stablecoins are all based on trust companies, Bitmain , Goopa and other third-party endorsements and supervision agencies to achieve additional circulation. At the control level, it is impossible to 100% guarantee the healthy operation of the market and avoid the occurrence of black swan incidents.
Since the enthusiastic launch of the DeFi sector in 2020 , many decentralized financial ecological applications such as liquid mining, DEX , oracle, lending, etc. have been derived . As the underlying asset of DeFi , the market value of stablecoins has exceeded US$ 50 billion, and it is still at a high speed. increase. Pledged stablecoins are a branch of stablecoins. Although the mortgaged stablecoins represented by DAI can be decentralized, the over-collateralization model greatly reduces the utilization rate of funds, and there is a liquidation risk in the face of extreme market conditions. Based on this risk, "algorithmic stablecoins" came into being, and algorithmic stablecoins are expected to solve the problem of centralization of legal currency mortgaged stablecoins and the low utilization rate of mortgaged stablecoins.
Algorithmic stablecoins use smart contracts to simulate other solutions such as the central bank's increase or tightening of the money supply. The program algorithms designed by smart contracts are used to execute additional issuances. The algorithms are based on algorithms to maintain the relative stability of the currency price. Representatives include Basis and Carbon. , Havven, etc.
Algorithmic stable currency advantages:
1. Security
Based on the decentralized characteristics of algorithmic stablecoins , no centralized issuing institution can freeze the stablecoins in your address, while centralized USDT or U.S. dollars, banks and institutions can freeze your money.
2. Stability
Regarding how algorithmic stablecoins achieve stability, there are many current attributes, among which Basis Cash is a novel one . The reason why EFT is stable is that the highest value is determined according to the liquidity, and the incremental issuance is based on market application demand liquidity, which is a complete DAO autonomous mechanism.
3. Liquidity
Stablecoins must have sufficient circulation and sufficient utilization rate to solve the liquidity problem. To put it simply, only when the consensus group is large enough can it be used for continuous trading operations.
The solution of algorithmic stablecoin is to give participants enough incentives to build a strong ecosystem. In this process, it is inevitable that a lot of short-term speculators will enter, and a good model can continue to operate. Short-term speculation becomes long-term investment, thus avoiding the death spiral.
However, most of the algorithmic stablecoins on the market are difficult to be truly stable, so as to satisfy their most important and only function, that is, stability to satisfy their role as a trading medium. Even if the algorithmic stable currency is large enough, there is no evidence to show that it maintains sufficient stability. If the market value expands to the so-called "sufficient amount" and fails to reach the ideal stable currency state, it cannot meet the needs as a medium of exchange. Practicality, then the algorithmic stablecoin may become an air without any data value.
EGG NETWORK has launched the first encrypted social ecology EFTalk in order to solve the defect that the current algorithmic stable currency cannot be data axiom . It has a built-in parallel constant price flow token EFT as the entire ecological flow equity certificate. The EFT constant price flow token is essentially an algorithmic stable currency, anchored based on user traffic data, embedded in a smart contract protocol, and the algorithm rules are that 80% of each "Barrett transfer" will actually be received , and 20% Each time the node users flow, there will be 4 times of targeted issuance , which is used to maintain the stickiness of the entire social ecology and the activeness of the consensus.
The principle of EFT 's private placement is beyond the traditional stable currency issuance method. It removes the third-party issuance endorsement. Not only is it technically decentralized, but the node layer is also completely decentralized. The entire process forms a close link with social traffic data, which is the bottom layer. The algorithm provides efficient flow data, the fast calculation and protocol execution of the carrying algorithm, the co-existence of algorithm data and flow value, complete DAO autonomy, leading the realization of "liquidity, liquidity", and increasing the consensus flow of EFT payments. To the driving force, and achieved a completely decentralized solution to the problem of low capital utilization, while giving the EFT algorithm a healthy economic growth, and continuously meeting the payment needs of multi-dimensional scenarios. EFT has completely reformed the traditional centralized stablecoins, mortgage-based stablecoins, and most of the current stablecoins that cannot be used continuously and stably. They only stay at the pain points of central control, limited use, and restrictive settlement. EFT mining docking chase Wei 188200092 truly realizes the huge payment value of algorithm stability, security, and liquidity.