Avalanche Founder: I'm Bullish on UST Once the Dust Settles Down
It Would Have Been ‘Doom’ Had This Happened in Traditional Finance
He also pointed out that the crypto and DeFi industry had just weathered a substantial bank run and that the space was ‘incredibly resilient.’
Additionally, he stated that ‘had this happened in TradFi, there would have been talk of doom and bailouts galore. One thing we know though, the bankers’ bonuses would still be paid.’
Decentralized Stablecoins Are Necessary
Furthermore, Mr. Gün Sirer added that decentralized stablecoins were necessary as fiat-backed stablecoins were subject to legal seizure and capture. According to his perspective, a decentralized economy needs a decentralized stablecoin that cannot be frozen or confiscated by authorities.
However, he cautioned that US-based teams could not succeed in developing an algorithmic stablecoin due to regulatory hurdles within the country. According to his analysis, only Korean, Singaporean, or Swiss teams have the right regulatory environment to develop algorithmic stablecoins.
There is Only Room for A Few Algo Stablecoins
Concerning the future of algorithmic stablecoins, he pointed out that there was not enough room for several algorithmic stabelcoins. The market only had room for one. He said:
There isn’t room in the market for a dozen, or half a dozen, or even just two algorithmic stablecoins. This is a market where the biggest one wins and all others lose.
If there’ll be a decentralized stablecoin that succeeds, it’ll be the one with the biggest value and the most battle-tested team.
[Feature image courtesy of iStockPhoto.com]
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