Stock Trading - Entry 47

I know, I know. USDC and Tether are the only two stablecoins available on Netcoins and Bitbuy as of the date of publishing this article. So why write about stablecoins? Well, although what I write here is not financial advice, I did want to peek behind the curtain to see if I then needed to investigate using another exchange to get into stablecoins. Here's what I found.

The core principle of stablecoins seems to get away from the wild west that has been the hallmark of the blockchain sphere for the past decade and trying to link blockchains to the established aura of certainty surrounding existing currencies and financial securities. Since everyone knows the USD, it should not be surprising that most of the more popular ones are linked or back by USD in some form.

Tether

According to this article, Tether is backed by a number of items from cash to US Treasury bills. It strikes me as being just like gold-backed blockchains, but with way more fiat and more emphasis for use in Asia. In short: not for me.

USDC

This stablecoin seems to work like replacing the USD, but is subject to inflation. This article provides a nice overview and I agree with others in that USDC is only useful for riding out price dips in the blockchain sphere. I wonder if that's where people park their money while they wait for the next pump-and-dump scheme to start.... In any case: not for me.

What other stablecoins are out there?

FDUSD

First Digital labs has this stablecoin that they want to operate like a USD replacement. While their website says it is backed by "cash and cash equivalents", what does that mean? You really have to dig on this page to find out plus I doubt an investor would actually be able to acquire any of those reserves in a worst-case scenario, neither of which impressed me. Verdict: not for me.

AMPL

This stablecoin is interesting as its value is linked to the consumer price index (CPI) and affects all AMPL token holders equally. What happens with respect to newly minted tokens? Why link it to something like the CPI that can be fudged and has no bearing whatsoever on the acquisition of assets (like a building or land or intellectual property rights)? Interesting, but without more direct links between the value of AMPL tokens and what else is being acquired: not for me.

USDS (formerly DAI)

This stablecoin has a reward system. Other than that dangled carrot, I see no value in using USDS tokens to trade other stabelcoins. Just trade the other stablecoins directly - or use a new blockchain I get into later inthis article. Since direct trading strikes me as unnecessary: not for me.

USDe

This stablecoin genuinely caught my eye. It uses Solana tokens and some other blockchain tokens as collateral - not USD. This changes the nature of some blockchain use cases. Take, Solana, for instance. Solana is bought, put on the side, staked to earn more (free) Solana tokens, and props up the value of USDe. The voting aspect of USDe would seem to be where influencing the value of USDe could happen. Control the number of the Solana tokens are used to back the value of USDe while guaranteeing interest in the Solana blockchain makes for an interesting balancing act requiring periodic human attention. Also, could the underlying blockchains like Solana vote out the link to USDe? That question aside, USDe has interesting math, involves an interesting concept, and I would really like to see it played out, but, at the time of writing this article, I cannot invest in it via Netcoins or Bitbuy. Since I am not that gung ho on acquiring USDe, I will let it pass for the time being.

My Take: USDe is a cloud on top of another cloud. I mean, financial currencies rely on our belief in their acceptance by others to make it work. Then you want to add a layer of the same thing in blockchains by relying on the pre-existing belief in financial currencies. House of cards IMO.

What I Bought Instead

Imagine a blockchain that relies on AI to use other blockchains for you without having to do all that yourself for whatever supposedly simple transaction you want to do. It is very secure, can be staked with a short unbonding period (see second screenshot below), does not need a whole lot of IT infrastructure (so not many computers and not much electricity), and can outperform even Solana in terms of transaction speed. Enter NEAR; currently quiet and revving up its engines. I'm in.

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