Another Stablecoin Bites The Dust While HBD Keeps Moving Ahead

The stablecoin market got a lot of attention the last couple years. This is something that is going to continue to heat up as the industry realized its value as a medium of exchange.

Each network is adding stablecoins to their offerings. Some are taking hold such as BUSD. Others are not faring so well. On Hive, we see the Hive Backed Dollar plugging along with projects looking to grow the offerings surrounding it.

The potential of this market is truly enormous. In an upcoming article we will be investigating the idea of "creating money out of thin air" and how it can really enhance a platform. The challenge with most of the projects that pursue this is they centralized to a large degree and separated from the blockchain community. With Hive, we see that is not the case.

Nevertheless, a "competitor" looks like it shut down operations, resulting in a total loss for investors.

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Ardana Halted Operations

Cardano is a tricky situation to figure out. Like much in cryptocurrency, there is tribalism pertaining to this blockchain. Some are ardent proponents, believing we are seeing the next Ethereum killer. Of course, it is worth mentioning that many were touted as having that title and, as of yet, nothing has brought that about.

At the same time, there are many who feel that Cardano is simply another pretender. Charles Hoskinson wields almost total power over the development and direction of the system. It is likely the distribution of the coin resembles that of most of these chains.

The industry is starting to realize what pre-mines, founder's stakes, and foundations behind an ecosystem really mean. Cardano is no exception.

Nevertheless, it is thriving in its own way which means project teams are attracted to the blockchain. It only seems reasonable that a stablecoin project would be built to service the payment needs of the system.

Here is where Ardana enters the picture. This was something that was highly touted, even enticing Hoskinson himself to invest. He is now stating that it seems any money in that project is "a total loss".

“I saw over the last few days some grumblings about [Ardana] having issues, and then on Twitter, [a] tweet came out that they have now discontinued operations, or at least they’re scaling back to the point where they’re no longer going to be able to deliver what they promised they were going to deliver.

Now, I was an investor in [the] projects through the C fund… It looks like it is probably a total loss, and what was incredibly distasteful to me was the management of these projects blamed Cardano for their failures.”

Source

Of course, we have to mention this was something that was being built on Cardano. It was not a part of the base layer. This is one thing that makes HBD stand out from many other stablecoins. When we then expand it to include those built on truly decentralized blockchains, we see how the field narrows a great deal.

Failure Is Part Of The Process

One of the main things people need to understand is that failure is a natural part of this process. We are dealing with technology, businesses, and start ups. Not everything that is attempted will result in success. In fact, we can surmise that the majority of what is created will end up failing in some manner.

When we look back at the ICO days, there were a lot of valid ideas. When we remove the scams and those that people had no intention of developing, we still have a long list of worthwhile concepts. Of course, for success, many factors are needed.

To start, many of the teams lacked the skills to complete what they set out to do. This reduces the number by another significant percentage. After that, money is an issue, with many teams not realizing how expensive things could get. That pushed the totals down even more.

After that, we look at all those which were mis-timed, and we see how few projects actually had what it takes to succeed. Today, some of those are still in operation although the degree of success is debatable. A lot is "still being worked on".

Since we deal with monetization in cryptocurrency, when a project fails, it usually takes everything with it. This means that money is lost. For those who are from the venture capital world, this is par for the course. People of this ilk are accustomed to it. The average person, however, this is something new. Unfortunately, few realize they are entering a realm where they are effectively operating as a VC, only discover the reality of things when they go under.

It is best for most to play things close to the vest and only get involved in those things with a decent track record and some safety. While nothing is guaranteed, some projects show their ability to ensure simply through the actions of the teams behind it.

Reducing Counterparty Risk

Here is another example where counterparty risk enters the equation. Again, this is not something people are accustomed to thinking about when it comes to money. It is also why we often discuss the concept of "thinking like a banker". Those who are involved in this industry are well aware of counterparty risk when it comes to money.

With HBD, the safety is in the fact that it is a base layer coin that requires only the trust the blockchain will keep running. As long as that is the case, the funds can be accessed. The other layers tied to the coin come from the additional protections put in place such as the haircut rule.

The creation of a new financial system holds great potential. For that to happen, however, people need to be educated as to what is taking place and the risks involved in certain things.

This is not going to be the last story we see like this.

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