Avalanche founder claims only one algorithmic stablecoin can succeed – defends Terra’s UST

The laminitis of Ava Labs, Emin Gün Sirer, has offered his opinions connected the clang of Terra’s algorithmic stablecoin, UST. 

According to Gün Sirer, determination is simply a request for decentralized algorithmic stablecoins successful the ecosystem owed to the censorship vulnerability of fiat-backed stablecoins.

Even fully-collateralized fiat stablecoins person depegged. Even immoderate of the anemic algo stablecoins person recovered.

Some thoughts. 🧵👇

— Emin Gün Sirer🔺 (@el33th4xor) May 10, 2022

Gün Sirer continued that a decentralized ecosystem needs a decentralized stablecoin that’s censorship and seizure resistant. However, helium doesn’t deliberation there’s country for much than 1 decentralized stablecoin.

There isn’t country successful the marketplace for a dozen, oregon fractional a dozen, oregon adjacent conscionable 2 algorithmic stablecoins. This is simply a marketplace wherever the biggest 1 wins and each others lose.

In his opinion, lone 1 algorithmic stablecoin tin succeed, which volition apt beryllium the 1 with the astir experienced squad and provides users the astir value. This origin is wherefore copycat projects are failing, according to the Avalanche founder.

To him, it volition instrumentality much than conscionable a method squad to pb an algorithmic stablecoin task successfully. It has to beryllium a squad that has the champion unfastened marketplace operations.

Gün Sirer added a astonishing connection that a U.S.-based squad wouldn’t beryllium capable to win with an algorithmic stablecoin task due to the fact that of the regulatory framework successful the country. He said the lone 3 countries with the due regulatory model for an algorithmic stablecoin squad are Singapore, Switzerland, and South Korea.

The crypto CEO besides stated that for immoderate algorithmic stablecoin to succeed, the underlying concatenation indispensable person a precocious capableness and beryllium precise resilient nether precocious load. At the moment, lone a fewer chains tin boast of this.

Citing these reasons, helium believes that UST volition retrieve and could spell connected to go the existent unit among algorithmic stablecoins.

On the inability of UST to support its peg, Sirer stated that each azygous stablecoin, including fiat-backed stables, had been de-pegged astatine 1 point. 

However, his views bash not beryllium close with each of the crypto community, which believes that much than 1 algorithmic stablecoin tin past successful the ecosystem.

As of property time, UST was trading astatine $0.92 aft losing its peg to the dollar.