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20 sats \ 6 replies \ @96c0b276a3 5 Aug \ on: Is it possible to develop a Stablecoin with Cashu? bitcoin
You can make any token you want, there's still counterparty risk with the mint. Even the btc denominated tokens are really stablecoins backed by bitcoin.
With the mint it's actually 'issuer risk'. Small but important difference.
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Is the issuer not a counterparty?
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Thank you both @96c0b276a3 and @telcobert for your observations.
@telcobert would you mind to elaborate on the 'issuer risk' detail?
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They are both 'credit risks'.
Counterparty risk refers to the other party of a contract (e.g. delivery of rice or oil),
Issuer risk to the issuer of a financial instrument (e.g. bond or bill of exchange).
Counterparty risk is significantly greater in terms of complexity, volatility, and contagion.
– Bitcoin M0 (commodity money) has none of these two risks (there are others).
– Contract parties paying with eCash settles C/P risk (Cashu and Fedimint can do)
– Issuer risk (slow/fast rug) must be eliminated on the mint level (needs Bitcredit Protocol).
More about this in a few weeks. Stay tuned.
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Hey, just read about your initiative. Where do it differs from cashu? (if?)
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Please and thank you!
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