EP 52: Throw those 2017 notes away. This is how to understand Stable Coins in 2021.

Economics Design

English - May 29, 2021 12:00 - 15 minutes - 14.6 MB - ★★★★★ - 9 ratings
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Previous Episode: EP 51: Understanding $ALCX (Alchemix) | A Unique Stable Coin with Limitations?

Next Episode: EP 53: The Mechanism Design of Maker (DAI and MKR) | The OG #StableCoin

Stablecoins are no longer what they used to be in 2017, as they have changed a lot from then till today in 2021. To understand how stablecoins are created and to compare different stablecoins, we must know 3 important characteristics: collaterals, mechanisms, and pegs — explained in this episode.

Why do we care about stablecoins? Because finding a mechanism to maintain its peg is the first step towards creating a global currency instrument that is decoupled from the country-based economy.

So, to figure out and experiment this mechanism, we explore the toolkit in #stablecoins. Think of them as the ingredients to the stablecoin recipe, in which you can tweak and play around with. The goal is to find a mechanism to create a stable asset as an output, so we can use this asset to trade and transact with economic agents in other ecosystems. Aka using USD to transact with someone in another country.

Timestamps:

0:00 – Introduction to stablecoins

0:38 – Collaterals, Mechanisms, and Pegs

1:58 – 2017 Stablecoin Mechanisms

3:46 – 2021 Stablecoin Mechanisms

7:21 – Pegs

10:01 – Amount of Collaterals

11:55 – Types of Collaterals

12:39 – How they all work together

14:12 – The future of stablecoins

15:35 – Closing

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