☢️Stablecoins & Bitcoin
The FxD token and platform actualizes the solution Bitcoin was conceived to produce, in an ESG, highly profitable way and solves the "stable coin trilemma" in the final stage of its growth cycle.
Bitcoin:
Is too volatile, the unpredicable value is driven by maxi-market-mania.
It has value but since it is not backed by real assets, it does not store value in the way that is necessary for a decentralized, global, central-peg monetary instrument.
Bitcoin has more features as an asset, not a currency. It is supposed to be both, it is not.
Use-cases as a currency do not show increasing adoption or replacement, even when one is clearly needed (and why it was legalized in a domicile)
For example: since the legalization of BTC as a legal currency in El Salvador it has 1.9% of the market.
Countries allow (or turn a blind-eye to) the use of stablecoins and a return to the USD "greenback" over Bitcoin (i.e. Venezuela)
Stablecoins:
If there is ANY pegging or reserving involving:
Fiats
Commodities:
1 type
A basket of commodities that mirrors fiats like CAD, AUD
A basket of commodities isn't diversified in a highly specific way
Are not 1000% collateralized in a way that forces large reserves of assets to sit in dormancy
Impacting the price of the collateral
Not using the resources efficiently
Falls into a category below and/or merely digitizes a part of the financial system without addressing the other issues Fxd does.
They are not worth comparing to FxD as a competitor.
Stablecoins Present Risks & Cannot Penetrate The Market:
THEY ARE NOT STABLE... AT ALL. WORSE THAN FIAT INFLATION!
IT GETS WORSE AS YOU GO DOWN THE RANKS... (click image to zoom)
EACH TYPE PRESENTS ITS OWN SET OF PROBLEMS...
Types:
There are more than just these general categories - some come close to how FxD is constructed, and others are very interesting in how they use commodities in novel ways and could become part of the collateral reserve tokens system for FxD. But, none arrive at the solution FxD provides, nor promote ESG in a macro. political-econ. manner.
Fiat Backed
Fiat Mirrors have the same problems normal fiats have
Not perfectly pegged
Manipulated
Threaten CBDC - coexistence is doubtful
Commodity-Backed
Are not novel.
Even hybrid baskets on-off chain are exposed to market risks
Gold-backed stables cannot be a legal tender per the IMF & Bretton-Woods
Crypto-Backed:
Cannot be used for the largest markets FxD penetrates
Exposed to the risks of the supporting crypto
Use protocol designs that are riddled with risks that are exacerbated during volatility and are more easily attacked.
Seinorage (zero-collateral) aka algorithmically stabilized:
Terra's UST/LUNA - exemplifies the issues perfectly
The "Stablecoin" Trilemma
This "trilemma" is a total misconception. This is actually the same issue that FIAT/Gold-Standard/Bretton-Woods/Bitcoin has. Fundamentally, it is a much larger dilemma, FxD solves.
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