UST is in a death spiral, will other stablecoins（USDT DAI FRAX）?
Recently, the death spiral of UST and LUNA was a big shock, and many newbies may have concerns about the risk of depeg other stablecoins, here we briefly explain. Crypto stablecoins are divided into three main categories.
For centralized fiat-backed stablecoins, the only risk may be the issuer's acceptance, as USDT has historically been off-anchor for brief periods, but has been able to return to anchor pricing quickly. Currently, compliant stablecoins like USDC are gaining market share. For decentralized over-collateralized stablecoins, because they are over-collateralized, there is basically no risk of long-term depeg, like DAI, which is a veteran project that has been upgraded after various extreme market changes, and is more able to keep the price peg, but also because of the over-collateralization method, DAI's market share cannot expand rapidly. For algorithmic stablecoins, it depends on the algorithm mechanism. The UST is maintained by the destruction of the LUNA mint to maintain the stability of the UST, in addition to the issuance of the UST from the Anchor unsustainable high interest rate, in the case of market tailwind, everything is fine, but the market headwind, Anchor can not pocket the circulation of the UST, the UST depeg and LUNA fall is triggered the death spiral. For FRAX, although it is a fractional collateralized model, the collateralization ratio is usually around 85%, which means that in the worst case scenario, $0.85 is also the lower limit for de-anchoring, while the project treasury is constantly generating revenue and the lower limit for depeg is also rising. Follow us Twitter: https://twitter.com/WuBlockchain Telegram: https://t.me/wublockchainenglish
If you liked this post from Wu Blockchain, why not share it? © 2022 Colin Wu Unsubscribe
|
Older messages
Tuesday, May 10, 2022
Editor | Colin Wu With the Fed raising interest rates by 50 basis points, the US stock market and crypto market have started to fall dramatically, Bitcoin has fallen to $30000, Luna has plunged 50%,
Global Crypto Mining News (May 2 to May 8)
Monday, May 9, 2022
1. Marathon Digital Holdings Reports First Quarter 2022 Results. Revenue increased to $51.7 million, Bitcoin production increased to 1259 bitcoin, GAAP net loss for the quarter totaled $13.0 million.
Monday, May 9, 2022
According to Similarweb, we can find the traffic of each centralized exchange website on May 9. In the past 30 days, the ranking of centralized exchanges is as follows: Binance Coinbase Bybit FTX
Friday, May 6, 2022
Web3 credential data network Project Galaxy's governance Token GAL was list last night at 8pm on Binance, Coinbase, FTX, and almost every other big major exchange. The launch price was $1.50 (ie
Global Crypto Mining News (Apr 25 to May 1)
Monday, May 2, 2022
1. CleanSpark, a sustainable bitcoin mining and energy technology company, today announced that it has finalized $35 million in non-dilutive financing from Trinity Capital Inc.. The three-year
Monday, August 15, 2022
UNDRGRND DIGS 038 View original post Bored Calvin — August 15, 2022 Gajian by Smarahakim AUGUST 15TH, 2022 5 Artists From the UNDRGRND Collection UNDRGRND DIGS is a periodical feature showcasing artis
Monday, August 15, 2022
Crypto Daily News - Aug 15, 2022 View on the Web Archives ISSUE 383 August 16th 2022 Crypto News NFT games have edge over 'money in, no money out' games: Polygon's Urvit Goel Polygon's
Shape A Narrative That Wins People Over To Your Community
Monday, August 15, 2022
Hey everyone - we're back with another Deep-Dive Monday. Today I'll show you how to create a clear narrative for your community. A great story is one of the few things that have the power to
TSE Sponsored：Global Crypto Mining News (Aug 8 to Aug 14)
Monday, August 15, 2022
1. According to Hashrate Index data, as of August 4 the price of a miner with an energy efficiency ratio below 38J/TH is $35/TH and $21/TH for 38-68J/TH. bitmainland has started to adjust the price of
Market Pulse by the Crypto.com Research & Insights Team (Week 32, 08/08/2022 – 15/08/2022)
Monday, August 15, 2022
ETH options open interest at a high as traders pile on leveraged bets. Asset managers' net-long position in CME BTC futures climbing. ETH enters short-term overbought territory.
Sri Lankans make crypto Ponzi scam claim....🤓
Monday, August 15, 2022
August 15, 2022 I don't turn to greeting cards for wisdom and advice, but they are a fine reflection of the general drift of the culture. -Susan Orlean Market Bitcoin $24217.00 -1.79% Live Prices
👉 The Terra crash could have been avoided with the MiCA Bill...
Monday, August 15, 2022
We bring you the top stories in crypto every week! Stories like... Monday August 15, 2022 Sign Up Your Weekly Update On All Things Crypto In Partnership With: TL;DR Situations Like The Terra Crash
What Decentralized Media Means To The Future of Digital Writing
Sunday, August 14, 2022
How Creator-centric Media are encouraging the multiplication of the world's best ideas.
Axie Origin Season 0, Life Beyond Alpha, Genopets Habitat and More | Play to Earn #136
Sunday, August 14, 2022
The summer of blockchain gaming is not over and this week marks the launch of a major update for Axie Infinity, one of the most popular games in the space. Let's see if season 0 (or phase 3) of
Weekly Project Update：Reddit Points, Conflux Changes to Ethash, APE Sells Off and Top 10 Projects
Saturday, August 13, 2022
Author：Mingyao Editor：Colin Wu 1、Reddit Taps Arbitrum Nova And FTX For Community Token Link News: The Arbitrum Nova chain is the second chain to be launched in the Arbitrum ecosystem, aims to solve