(Starry Night, Van Gogh)
Algorithmic stablecoins are not hot spots on the market today, and it is difficult to have impressive performance in the short term, and participating in algorithmic stablecoins also carries a very high risk. What needs to be specifically reminded here, therefore, is that algorithmically stable currencies carry zero risk. If there is no tolerance for risk, please do not participate.
There are several reasons why algorithmic stablecoins still pay attention to them during their low periods:
1. DeFi without algorithmic stablecoins is not real DeFi
Maybe a lot of people just use DeFi as a hype tool, and from that perspective, we see defi as a future development trend. From this perspective, the Lego defi calls for the final piece of the puzzle. This puzzle is an algorithmic stable currency.
Currently, there are many stable coins across the defi, including stable coins based on fiat currencies, stable coins with a mortgage, stable coins with a mixed mortgage and algorithms, stable coins that are flexible, but there is still a shortage of stable coins that are truly decentralized. Defi requires algorithmic stablecoins to achieve its goals.
According to Blue Fox Records, defi is an organic organization. It is born out of people's thoughts and needs. It will eventually build a set of mechanisms that serve humans but do not depend on human evolution. The eventual development does not depend on it. Anyone's will can be transferred.
2. Algorithmic stablecoins are the true holy grail of encryption
In this regard, until now, the appearance of Blue Fox Notes has never changed. It didn't matter if it was at the top or the trough, whether it was highly anticipated or no one cared about it, it always happened. Blue Fox Note's focus on algorithmic stablecoins is not due to base upgrades. In early 2018, Blue Fox Note took notice and published a related article "Comparison of USDT, BaseCoin and MakerDAO: Who Will Win?" "Deep thoughts on the basis of a stable currency".
From the perspective of maturity, BTC> ETH> algorithmic stable currency, and from the perspective of potential, algorithmic stable currency> ETH> BTC, this view has so far not changed.
(Holy Grail, photo: Marcelo Somers)
Algorithmic stablecoins are projects of very high difficulty, and their success is even more difficult than the original btc. Even today, the most anticipated btc has been declared dead hundreds of times in history. Of course, the logic here is not to force algorithmic stablecoins to be juxtaposed with btc, as this logical sophistication has nothing to do with whether algorithmic stablecoins work or not.
Btc's original aim was to become a peer-to-peer electronic payment system and to become electronic cash. However, over time, btc has failed to achieve its original goals, instead going further and further in terms of value storage and circulation, and increasingly becoming the "gold" of the digital age. Algorithmic stablecoins can take over to accomplish btc goals. And this btc goal is not finished yet, can algorithmic stablecoins be resolved? This is unknown, but in terms of difficulty, it far outweighs btc's goals. However, the favorable condition today is that few people believed in btc at the time, and the encryption field now has a lot of supporters.
Since the algorithmic stable currency difficulty coefficient is the largest in the area of encryption, it is unlike borrowing, unlike dex, and unlike derivatives. It's real, with visible benefits and incomes that everyone can understand. Support, so success in these areas is almost inevitable, it's only a matter of which project is successful.
3. Algorithmic stable currency is an unprecedented human social practice
Scientific experiments may fail, and social practice may fail too. Social practices are more difficult, more factors out of control, and more uncertain. Algorithmic stablecoins cannot be said to have been counterfeited, because they have not followed the complete path. But whether it will be faked in the future is hard to say.
No one can guarantee that algorithmic stablecoins will succeed. Since this is a path no one in human history has walked, it is a narrow gate.
In our opinion, algorithmic stablecoins will be the continuing pursuit of defi, and will benefit from the ecological growth of defi as a whole. As long as the ecology defi reaches a certain level of robustness, algorithmic stablecoins will be embedded in the defi system.
4. Successful algorithmic stablecoins are not necessarily the basis
While we currently pay the most attention to the bases, final success is not necessarily the basis. There may be new algorithmic stablecoins that will stand out in the future. But as long as it is successful, it is good for defi development. Success need not be grounded. Blue Fox Notes expects a more truly innovative stable coin practice.
5. Algorithmic stable currencies are very risky, and are not suitable for most people to participate in at an early stage
The stable currency of the initial 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 must have had a lot of volatility. During this volatility, it must be a zero-sum game. One person's gain is based on another's loss.
Therefore, in the early days of Blue Fox Notes it was always emphasized that if you are not familiar with the mechanics, you should not get into the game. It 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 practice of algorithmic stablecoins succeeds, there will be countless tosses on the edge of life and death. Most algorithmic stablecoin projects will eventually fail, and will become fluff.
6. What is the basis for algorithmic stablecoins to gain a foothold?
Getting a solid foothold for algorithmic stablecoins depends on two points:
* Continued demand for decentralized stablecoins
Current demand for bac Basis stablecoins comes primarily from liquidity mining, i.e. obtaining base income, but this is not a continuous process as there is no real source of demand. If you rely solely on this, it is undoubtedly a "perpetual motion machine", which is unsustainable.
In order to solve it, the actual need for reading needs to be increased, this is naturally understood by the base team, which solves this problem from short-term, medium-term and long-term strategies. At this point, you can refer to the previous article "Basic Algorithmic Stable Coin Path" by Blue Fox Notes.
In the short term, it tries to stabilize prices through arbitrage and the basic incentive of a stable swap; in the medium term, it tries to encourage use through synthetic asset and savings models; in the long term, it tries to build stability in the currency index through a swap model to break away from dollar resistance.
From the observations of Blue Fox Notes, efforts to synthesize assets are critical to the success of bac. It can learn from the synthetix model in depth, guide liquidity through curve-like deals, and ultimately build the generation and synthesis of synthetic assets. Trade network.
Of course, how it develops ultimately depends on the decision making and implementation of the project party and the community, and whether this defi development window period can be fully utilized.
* the definition of sustainable development
Defi is the ground for algorithmic stablecoins. Without fertile defi soil, it is unlikely that algorithmic stablecoins will succeed. As long as the definition itself can develop, the practice of algorithmic stablecoins can continue.
The scale of the current defi is still small, but if the defi exceeds the total market value of the trillion dollars, algorithmic stablecoins will be an indispensable part. Of course, the current defi includes usdt, usdc, and dai, and the demand for algorithmic stablecoins is not strong, or even negligible. But as the defi continues to develop, this demand will become even stronger. Defi is the support for algorithmic stablecoin success