Stablecoins are no longer what they used to be in 2017, as they have changed a lot from then till today in 2021. To understand how stablecoins are created and to compare different stablecoins, we must know 3 important characteristics: collaterals, mechanisms, and pegs — explained in this episode.
Why do we care about stablecoins? Because finding a mechanism to maintain its peg is the first step towards creating a global currency instrument that is decoupled from the country-based economy.
So, to figure out and experiment this mechanism, we explore the toolkit in #stablecoins. Think of them as the ingredients to the stablecoin recipe, in which you can tweak and play around with. The goal is to find a mechanism to create a stable asset as an output, so we can use this asset to trade and transact with economic agents in other ecosystems. Aka using USD to transact with someone in another country.
0:00 – Introduction to stablecoins
0:38 – Collaterals, Mechanisms, and Pegs
1:58 – 2017 Stablecoin Mechanisms
3:46 – 2021 Stablecoin Mechanisms
7:21 – Pegs
10:01 – Amount of Collaterals
11:55 – Types of Collaterals
12:39 – How they all work together
14:12 – The future of stablecoins
15:35 – Closing