{"id":446299,"date":"2022-05-13T10:11:28","date_gmt":"2022-05-13T07:11:28","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/trust-in-stablecoins-infinitely-more-important-than-collateral\/"},"modified":"2022-05-13T10:11:28","modified_gmt":"2022-05-13T07:11:28","slug":"trust-in-stablecoins-infinitely-more-important-than-collateral","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/trust-in-stablecoins-infinitely-more-important-than-collateral\/","title":{"rendered":"# Trust in stablecoins &#8216;infinitely more important&#8217; than collateral"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a262215cd8ec\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a262215cd8ec\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/trust-in-stablecoins-infinitely-more-important-than-collateral\/#%E2%80%9D_Trust_in_stablecoins_%E2%80%98infinitely_more_important_than_collateral_%E2%80%9C\" >&#8221; Trust in stablecoins &#8216;infinitely more important&#8217; than collateral &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Trust_in_stablecoins_%E2%80%98infinitely_more_important_than_collateral_%E2%80%9C\"><\/span>&#8221; Trust in stablecoins &#8216;infinitely more important&#8217; than collateral &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvZTEyYWU4MjAtZDhlZC00N2I3LWI1ZmMtYjkwNGY0ZTI3NWE5LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-2a0745c6>In light of recent market effects due to the collapse of the Terra USD (UST) stablecoin, several questions should be answered about what makes a stablecoin usable as the crypto market expands.<\/p>\n<p>Co-founder of crypto financial service provider VegaX Holdings Sang Lee favors decentralized stablecoins over their centralized counterparts but thinks they must be coins that people can trust, which poses a dilemma for the industry.<\/p>\n<p>In a conversation with Cointelegraph on May 13, Lee pointed out that the important utility stablecoins serve in the crypto ecosystem was offering traders a uniform unit of account, like the U.S. dollar does for the global markets. However, he noted that \u201cthe way in which these things are maintained is important, too.\u201d<\/p>\n<blockquote><p>\u201cThe most important thing is that it holds its peg because then that single unit of account begins to be unreliable and unusable.\u201d<\/p><\/blockquote>\n<p>Lee believes that for stablecoins to be truly usable, people have to trust them. This creates a dilemma because, he said, \u201cyou can only use a currency if you trust it, but you trust it because other people use it.\u201d In his view, that dilemma can be nipped in the bud by ensuring there is a broad use case before building because the \u201cuse case is infinitely more important than collateral.\u201d<\/p>\n<p>The issues of trust and design are at the forefront of the discussion surrounding the UST stablecoin, which lost its peg and drove down the price of Terra (LUNA) and Bitcoin (BTC), its collateral. As trust rapidly faded in the stablecoin, so did its utility, forcing its value and the value of LUNA to evaporate.<\/p>\n<p>There are at least 97 stablecoins across the crypto industry today according to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.coingecko.com\/en\/categories\/stablecoins\">CoinGecko<\/a>, most of which are pegged to the USD. While that number may seem high, Lee contests that there should be \u201cmore than a handful\u201d of them, and they should aim to be decentralized. <\/p>\n<blockquote><p>\u201cWe can\u2019t have &#8216;one to rule them all,&#8217; because that\u2019s what we\u2019re trying to stop in the first place.\u201d<\/p><\/blockquote>\n<p>Among the top five stablecoins by market cap, just Dai (DAI) and Magical Internet Money (MIM) are aiming to be decentralized.<\/p>\n<p>Lee acknowledges that it is unrealistic to expect the leading stablecoins to be decentralized right away but feels they \u201cshould be on a path to it in the future.\u201d This idea stems from his perception that the single point of failure that cryptocurrency is trying to solve is \u201ca lack of transparency and accountability\u201d in centralized currencies.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>SEC&#8217;s Hester Peirce says new stablecoin regs need to allow room for failure<\/em><\/strong><\/p>\n<p>In pushing crypto into a more decentralized landscape, Lee warns those in the industry to move away from a combative stance and more into a friendly, collaborative one. He said, <\/p>\n<blockquote><p>\u201cWe can move the world forward into a blockchain-based ecosystem, which is overall a good thing. But it\u2019s better to talk about what we in blockchain think is important rather than shouting that our tech is better.\u201d<\/p><\/blockquote>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/trust-in-stablecoins-infinitely-more-important-than-collateral\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Trust in stablecoins &#8216;infinitely more important&#8217; than collateral &#8220; In light of recent market effects due to the collapse of the Terra USD (UST) stablecoin, several questions should be answered about what makes a stablecoin usable as the crypto market expands. Co-founder of crypto financial service provider VegaX Holdings Sang Lee favors decentralized stablecoins&#8230;<\/p>\n","protected":false},"author":1,"featured_media":446300,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDUvZTEyYWU4MjAtZDhlZC00N2I3LWI1ZmMtYjkwNGY0ZTI3NWE5LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,74983,75493,122378,74355],"class_list":["post-446299","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-decentralization","tag-stablecoin","tag-terra","tag-adoption"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/446299","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=446299"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/446299\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/446300"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=446299"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=446299"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=446299"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}