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▲ seviu 5 days ago

Dai might have been algorithmically backed but it’s now a flavor of usdc since it’s backed in its majority by usdc.

So far all algorithmically backed stablecoins have failed. Remember Terra Luna.

▲immibis 5 days ago | parent [-]

> So far all algorithmically backed stablecoins have failed. Remember Terra Luna.

So that's a sample size of 2, and from those 2, 1 has failed. Not exactly "all"

▲seviu 5 days ago | parent [-]

I gave you the most dramatic example. So far no undercollateralized, algorithmically backed $1 stablecoin has sustained a reliable peg at scale over multiple years.

Zero. Nada. There was always somebody somewhere exploiting it.

TerraUSD USN USDN Basic Cash

All failures so far, every time a death spiral.

FRAX started as algorithmic and had to move to over collateralization

Same with DAI

You really can’t call them like that once they become backed by USDC

▲immibis 4 days ago | parent [-]

Your bailey:

> all algorithmically backed stablecoins have failed

Your motte:

> no undercollateralized, algorithmically backed $1 stablecoin has sustained a reliable peg at scale over multiple years