Messari Analyst: Algorithmic Stablecoins Are Recovering

特邀专栏作者

2021-03-04 17:00 (UTC+8)

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Messari analyst Ryan Watkins said that algorithmic stablecoins are experiencing a renaissance, driven primarily by the idea of protocols owning collateral.

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Messari analyst Ryan Watkins said that algorithmic stablecoins are experiencing a renaissance, driven primarily by the idea of protocols owning collateral.

Editor's Note: This article comes fromChain News ChainNews (ID: chainnewscom)Editor's Note: This article comes from

Chain News ChainNews (ID: chainnewscom)

, by Ryan Watkins, Messari Analyst, translated by Perry Wang, published with permission.

1. Remember algorithmic stablecoins?

But what would you say if I told you that they're actually going through a renaissance, driven primarily by the idea of protocols owning collateral?
question
2. In Messari’s two research papers on the future of blockchain central banks, the first covers algorithmic stablecoins:
Market potential

question

revival

most promising project

It is also the first report in Messari's new enterprise research offering.

3. Why care about algorithmic stablecoins in the first place? The content preview is as follows

4. Stablecoins matter.

The total market capitalization of stablecoins topped $50 billion last week as users continue to need a stable means of storing and transferring value on public blockchains.

5. In the past 12 months, the transaction volume of stablecoins reached 1.5 trillion US dollars, and it is expected to exceed 1 trillion US dollars in the first quarter of 2021.

6. But the above is only the beginning of the story.

Stablecoins are one of the few public blockchain applications that legitimately have a target market in the tens of trillions of dollars.

7. The US dollar currently accounts for about 55% of global international transactions, savings and loans, so there is a large structural demand for US dollars globally, especially outside the US financial system.

8. Stablecoins are uniquely positioned to provide convenient access to U.S. dollars for individuals and businesses around the world to meet this demand for offshore U.S. dollars. This is because stablecoins are digitally native, globally accessible, and have stronger Anti-forfeiture capability.

9. While it is difficult to estimate the size of the offshore dollar market (dollar deposits held outside the US), data from the Bank for International Settlements suggests it could exceed $57 trillion.

Crazy as it may sound, this is where stablecoins come in to grab the market.

10. While stablecoins have seen widespread adoption in the crypto space so far and are powerful in their current state, they are far from perfect.

11. The leading stablecoins by market capitalization today are centralized stablecoins (such as USDT), whose holders may face censorship, seizure and counterparty risk.

The aforementioned properties make these stablecoins less scalable and less reliable in society.

12. On the other hand, we already have decentralized stablecoins, and although they too have shown a lot of progress, they are not perfect either.

They are often capital inefficient, governance-heavy, difficult to scale, and in some cases unstable (e.g. first-generation algorithmic stablecoins).
13. So how exactly does this algorithmic stablecoin renaissance backed by protocol-owned collateral kick off?
14. Take a deep dive into our latest research report, which contains a detailed overview and analysis of:

FRAX—Leader of new genre algorithmic stable currency

invest

stable currency

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