Stablecoins Are Silly — Stable tokens are not
Algo-Stabilized Collateralized-Commodity Denomination, One-Peg Systems are Smart
Stablecoins are seemingly better than any coin that is named after a restaurant menu item, animal(s) or a mythical-to-the-moon-meme token. Although these cryptocurrencies have cultural value, just like a high-priced NFT — they represent things and do serve a purpose, unfortunately, their purpose is sometimes driven by a scheme that uses that purpose for the sole gains of their creators at the expense of their users. “Funny money”#crypto that feeds into the current common cultural perspective serves a purpose, either as a literal or satirical “f-you” to the antiquated economic systems #defi is doing its best to fix. Stablecoins have been the alternative to the alt-coin and a way for pre-cryptocurrency business and politics to engage in movement, but by this method have actually increased their obvious inabilities to continue holding their unequal position of hoarding resources, at an enormous expense, using the excuse of regulatory, short-term, profit-driven requirements.
Unfortunately, 99% of the +10,000 projects in blockchain (DLT) are working on some part of a digital asset protocol/ecosystem and aren’t doing it right. The largest investors, institutional or personal crypto billionaires (BTC whales) mostly have the strategy incorrect too.#Bitcoin (BTC), the first DLT cryptocurrency, was created because of the mysterious Satoshi, and was supposedly inspired, by infuriation, with the lack of stability and “fairness” central banking fiat paper currencies inherently contain. The solution (in an overly simplified explanation) was a digital ledger (record of accounting/transactions) that tracked all BTC in an extremely secure, cryptographic chain of time-sequenced code that had a finite (not inflationary) supply, that arguably more stable in the long-run. However, it is not designed with an incentive structure that is price stabilizing, (see “Unstable Uses of Tokens”). What it does have is the inherent structure of contractual obligations via trading asset resources in a single denomination that translates into a price for items regardless of their fiat-determined locale. It has controls in place to reward supporters of the network that allows ways of transferring value between parties digitally. BTC was meant to remove the involvement of centralized, traditional, politically (and therefore corruptible) controlled central banking.
- “Stablecoins” are cryptocurrencies that use BTC DLT or copies (forks) of it i.e. Ethereum blockchain (ETH) to either represent the value of a fiat currency by having some reserves (deposits that can be liquidated and/or used to be transferred into the fiat currency) of the fiat they mirror, at best. In some instances, i.e. Terralabs Luna (UST), stablecoins are kept to be the same price as the paper fiat they represent digitally, by using a cryptocurrency invented by the project team, that is traded on cryptocurrency asset markets, creating its on valuation through the mechanisms of the places it is available, and that is used to algorithmically stabilize the price to represent the fiat.
- Financial technology businesses i.e. remittance and payment platform providers (ex. credit card companies or Paypal/Square) are using stablecoins as a way for traditional businesses to bridge into the DLT-DeFi space in a way that seems to accommodate the paradigm of national fiat paper money and the purpose & concept BTC was created to manifest. This is also done to serve the lack of national regulatory oversight in the majority of the largest GDP countries in the world.
- Given stablecoins are called stable, while using the technology created in response to their analog mirrors’ total lack of stability and the system bust-boom cycles debt-driven central banking generates, the name alone is absurd.
- From a governmental, regulatory perspective stablecoins are taunted by businesses as a way of saying “look at us we are using cryptocurrency” to their users, and to governments, to make them feel secure. Almost all governments are seeking to transfer to CBDC (central bank digital currencies), at minimum, because it is significantly more practical than using paper money. As transactions and fiat money become more inflated, it is not sensible to pay for things in the paper “cash,” nor has it been for almost 200 years. Banknotes and financial products that are not digital are impractical because they store information on paper, which is not as easy to back up and safeguard as digital versions. Arguments against BTC being the solution are found in the article “‘Bitcoin is not “digital gold.’”From a political risk perspective, stablecoins are a threat to national sovereignties political control, which most of us know: power is more valuable than money, which can be printed and/or replaced by the will of those in power (hence BTC). Ironically, the “power” of BTC, or lack thereof, has yet to truly be addressed in the mainstream dialogues given that it is easily decrypted by quantum computing technology, that is only accessible by large technology corporations, and the governments whose money, BTC was created in the rebellion of.
- The stupidity is self-explanatory. Cryptocurrencies that represent the thing the concept was created to replace: instability, are by definition, literally unstable. As CBDC’s go “live” and adopted mainstream, it is logical that stablecoins will be the first, and possibly only, cryptocurrencies that are deemed illegal, if not made unnecessary by being replaced by the digital versions of the fiat they represent.
- None of these solve the problem of stable denominations, which is not necessarily money or currency but is representative of equal valuation that can be used for cross-border trade and industry.
The concept of stability needs to be replaced by the idea of price equality, recently some of these have been called “flatcoins” — a denomination is slightly different, but the purpose is what creates a difference.
Price equality is when all currencies that are fiat (supported by an underlying political sovereignty's governing law) stop having different values for the same thing, with the same currency, regardless of their geolocation in relation to the country the currency is being used in. This is what the current, multi-peg currency foreign exchange system proliferates: the cost of the exact thing in one location has a different price for the same product or service, using the same currency (regardless of whether it is deemed “legal” by the governmental regulation in that location).
The point has been made, no thesis is perfect or it would be fact, productive criticism and polite contradiction are hoped. FATExDAO is building a neo-DeFi, global bank from a self-funding decentralized autonomous organization (DAO) using a governance token reward — “emissions” model to do what no one has yet to try. We ask you to question, read, research, join and add value to the crisis of inadequacy in economic systems that have inhibited the proper resource allocation necessary for the evolution and survival of human civilization. The more who partner and/or join, the more likely the mission we are all a part of, whether we admit it or not, is successful: sustaining the longevity of each individual and future generations of humanity with an endowed wealth that permits societal prosperity for all. This will enable us to control our FATE by the multiple of those who participate, hence FATExDAO.
To learn about a project that comes close to a perfect solution check out FATExDAO.io and read the “Green Paper,” which may be a little esoteric so the raw YouTube videos (requiring an update, admittedly) may help explain part of the path, we admit there is still a lot of work to be done.
FATEx.io is currently on Harmony Blockchain, has recently launched a dex for the purpose of pooling members' assets to undertake a mission that will have succeeded in acquiring a significant market share in the fate of the future DLT-Tokenized world who’s creation is underway.
FATExDAO launched the FATE : PAXG pair today — the first gold-backed liquidity pool on @Harmonyprotocol $ONE. We hope you will join us. The fight for the future is against the inherited inadequacies of history. There is work to be done.