There are several reasons why the algorithmic stablecoin is still paying attention to it when it is at a low period:
DeFi without algorithmic stablecoin is not real DeFi
Maybe many people just used DeFi as a hype tool, and from the perspective of Blue Fox Notes, we see defi as a future development trend. From this perspective, defi Lego needs the last piece of the puzzle. This puzzle is an algorithmic stable currency.
At present, there are many stable coins in the whole defi, including stable coins based on fiat currencies, stable coins with mortgages, stable coins with mixed mortgages and algorithms, flexible stable coins, but there is still a lack of truly decentralized stable coins. Defi needs algorithmic stablecoins to accomplish its goals.
According to Blue Fox Notes, defi is an organic organization. It is born out of people’s thoughts and needs, and will eventually build a set of mechanisms that serve humans but are independent of human self-evolution. Its ultimate development is independent of human self-evolution. The will of any person is transferable.
Algorithmic stablecoins are the real holy grail in the encryption field
In this regard, until now, the view of Blue Fox Notes has never changed. No matter if it is at a peak or a trough, whether it is highly anticipated or no one cares about it, it has always been the case. Blue Fox Note's focus on algorithmic stablecoins is not because of the rise of basis. As early as 2018, Blue Fox Note has paid attention to it and published a related article "Comparison of USDT, BaseCoin and MakerDAO: Who Will Win?" "In-depth thinking about the stable currency Basis".
From the perspective of maturity, BTC> ETH> algorithmic stable currency, and from the perspective of potential, algorithmic stable currency> ETH> BTC, this view has not changed.
Algorithmic stablecoin is a project with a very high degree of difficulty, and its success is even more difficult than the original btc. Even today, the much-anticipated btc has been declared dead hundreds of times in history. Of course, the logic here is not to force the algorithmic stablecoins to be juxtaposed with btc, because this logical sophistry has nothing to do with whether the algorithmic stablecoins can succeed or not.
The original goal of Btc is to become a peer-to-peer electronic payment system and become electronic cash. However, with the passage of time, btc failed to complete its original goal. Instead, it has gone further and further in terms of value storage and circulation, and has increasingly become the "gold" of the digital age. The algorithmic stablecoin may take over to complete the goal of btc. And this goal btc has not been completed, can the algorithmic stablecoin be completed? This is unknown, but in terms of difficulty, it is far greater than the goal of btc. However, today’s favorable conditions are that few people would believe in btc at the time, and the encryption field now has many supporters.
Because the difficulty coefficient of algorithmic stable currency is the largest in the encryption field, it is not like borrowing, not like dex, and not like derivatives. These are tangible, with visible benefits and income that everyone can understand. Support, so success in these areas is almost inevitable, it's just a question of which project succeeds.
Algorithmic stable currency is an unprecedented human social practice
Scientific experiments may fail, and social practice may also fail. Social practice is more difficult, more uncontrollable factors, and more uncertain. The algorithmic stablecoin cannot be said to have been falsified, because it has not yet traveled the complete path. But whether it will be falsified in the future is hard to say.
No one can guarantee that the algorithmic stablecoin will succeed. Because this is a road that no one has ever walked in the history of mankind, this is a narrow gate.
In our opinion, the algorithmic stablecoin will be defi's continuous pursuit, and it will benefit from the growth of defi's overall ecology. As long as the defi ecology reaches a certain degree of robustness, the algorithmic stablecoin will be embedded in the defi system.
The successful algorithmic stablecoin is not necessarily the basis
Although we are currently paying most attention to the basis, the ultimate success may not necessarily be the basis. Maybe there will be new algorithmic stablecoins that will stand out in the future. But as long as it can be successful, it is a good thing for defi development. Success does not need to be based. Blue Fox Notes looks forward to more truly innovative stable coin practices.
Algorithmic stablecoins are extremely risky and are not suitable for most people to participate in the early stage
The stable currency of the early algorithmic stable currency has no actual demand support, and is basically based on the game. It was highly speculative in its early days, and it was bound to have great volatility. In the process of this volatility, it must be a zero-sum game. Some people make money on the basis of others who lose money.
Therefore, in the early days, Blue Fox Notes always emphasized that if you are not familiar with the mechanism, it is best not to enter the game. This is also what Blue Fox Notes has always emphasized that unless one has a deep understanding of the matter itself, it is best not to participate.
Before the successful practice of algorithmic stablecoins, there will be countless tossings on the edge of life and death. Most of the algorithmic stablecoin projects will eventually fail, and they will be a feather.
What is the basis for algorithmic stablecoins to gain a firm foothold?
To gain a firm foothold for algorithmic stablecoins depends on two points:
Sustainability of the demand for decentralized stablecoins
The current demand for Basis's stablecoin bac is mainly derived from liquidity mining, that is, earning bas income, but it is not a sustainable process because there is no real source of demand. If you just rely on this, it is undoubtedly a "perpetual motion machine", which is unsustainable.
To crack it, it is necessary to increase the actual demand of bac. This is naturally also deeply realized by the basis team. They solve this problem from short-term, medium-term and long-term strategies. On this point, you can refer to the previous article "Basis's Algorithmic Stable Coin Road" by Blue Fox Notes.