Cardano Founder Believes Algorithmic Stablecoins Can Realize Satoshi’s Vision
Charles Hoskinson, founder of the Cardano network, remains bullish on algorithmic stablecoins despite the recent collapse of Terra’s UST stablecoin. Hoskinson believes that stablecoins are the key to realizing Satoshi Nakamoto’s vision for Bitcoin. As the largest asset by market capitalization, Bitcoin’s vision is fundamental to the entire crypto ecosystem and its participants.
Amidst the ongoing uncertainty in the crypto industry, following the depeg of Circle’s USDC stablecoin and several other stablecoins, Hoskinson argues that algorithmic stablecoins like Cardano network’s Djed could play a crucial role in realizing Nakamoto’s plan for Bitcoin. Banks are fractional reserve and susceptible to “bank runs”, leaving users exposed to the risk of not being able to access their funds.
Algorithmic stablecoins are designed to hold their peg through mathematical equations and are typically uncollateralized. Djed, an overcollateralized stablecoin in the Cardano ecosystem, uses an algorithm to control its supply.
Despite the recent turmoil in the market, Djed has maintained its peg and even traded at a premium of $1.01 while USDC, FRAX, DAI struggled to hold their pegs.
In conclusion, while there is still uncertainty surrounding algorithmic stablecoins, Hoskinson believes that they could be key to Satoshi’s vision and that they are a crucial research stream to fully realize Nakamoto’s plan for Bitcoin.
Hoskinson’s comments align with BitMEX co-founder Arthur Hayes’ recommendation that market participants move away from stablecoins pegged to the US dollar and fiat currencies. Hayes has introduced the NakaDollar (NUSD) as an alternative solution.
Suggested Reading:
- Cardano Makes History: Wraps First Bitcoin(cBTC) on its Network, Unlocking New Possibilities for Interoperability and Decentralized Finance
- Cardano Considers Two-Sided Approach to Staking with Hoskinson’s Contingent Staking Model
- Banking Crisis Rocks Crypto Industry, Driving US Firms to Seek Safe Haven in Switzerland and Beyond
- Coinbase pauses USDC to USD for the weekend – Puts investors in worry
- Binance has temporarily suspended auto-conversion of USDC to BUSD – Potentially due to Circle-Silicon Valley Bank exposure
- Circle’s USDC Stablecoin’s Cash Reserves at Failed Silicon Valley Bank
- Federal Reserve Chairman Jerome Powell’s Bold Endorsement: Proper Regulation Could Unlock Stablecoins’ – Potential in Financial Sector
