0 sats \ 3 replies \ @NachoKeys 23 Aug 2022 \ on: Ask SN: Decentralized stablecoins on lightning bitcoin
Probably silly question but how could a stablecoin tied to a fiat base ever not be centralized in some capacity?
Doesn't someone need to make the real decisions on how to keep the peg stable and generate just enough extra profit to make this even worthwhile?
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110 sats \ 2 replies \ @SHORT_TSLA 23 Aug 2022
There are multiple ways.
Stablesats uses a derivatives strategy, so there is no "issuer" per say.
Overcollateralized stablecoins are backed by collateralized debt positions owned by users.
Algorithmic stablecoins are a synthetic asset backed by a set of incentives to keep the peg.
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0 sats \ 1 reply \ @NachoKeys 24 Aug 2022
Thanks but I thought Terra/LUNA showed perils of algorithmic pegging? Someone figures out how to exploit something unforeseen and it's over.
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0 sats \ 0 replies \ @SHORT_TSLA 24 Aug 2022
Yes, but there are non-algorithmic overcollateralized stablecoins or semi-collateralized semi-algorithmic (like frax).
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