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RE: Was 64.26% the Top Bitcoin Dominance This Cycle or Not?
What would be the use for that blockchain? Stablecoins are a link between the crypto and the fiat worlds, and I don't think one needs a dedicated blockchain for them to be useful.
Also, there are 3 kind of stablecoins:
- the ones with USD/fiat backing
- the ones with over-collateralized crypto backing of top crypto coins
- the algorithmic stablecoins, usually in dual-coin tokenomics, like HIVE and HBD.
There can be a combination of them.
A stablecoin that has backing from fiat (either cash or liquid instruments) or from the coin of a different blockchain can't really be on its own blockchain. What would be the point of the stablecoin's blockchain, if the backing value is elsewhere?
And algorithmic stablecoins are usually dual systems, with one volatile coin and another stable coin, where the main coin is the volatile coin (i.e. HIVE), which is also the one that backs the stable coin.
0.00002996 BEE
So basically, even it theory, it doesn't make much sense.
Thanks for the detailed explanation, learnt something new about the mechanisms of stablecoins. I didn't have a clear mental picture of algorithm stablecoins before, in that it's dual-coin tokenomics, and one of the tokens is the main token that holds the secondary token in a stable place more or less. Now, I understand better also the logic behind viewing these type of stablecoin as remotely risky, because the underlying asset can be a volatile asset with its own set of risks, depending on its own tokenomics or structure.
Is it somehow correct to say that algorithm stablecoins can also be termed as derivatives given they're derived from an underlying asset? Also, can the number of algorithmic stablecoins be larger than the number of the underlying asset it's backed on, as in, 100 HIVE and 1000 HBD?
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