TronDAO: Taps Into $300 Million To Back USDD
Justin Sub sprug USDD on the world. His new stablecoin was going to have the highest interest rate to coax people into using it.
In this video I idiscuss how he did what everone is: not building value which leads resiliency.
▶️ 3Speak
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that would then be to attract new investors to your stablecoin but it seems that it does not have a solid foundation or I am wrong
I have seen the USDD depeg that took place in the past 7 days. It would be unbelievable if the USDD collapsed as well. There would be an increase in mistrust of stablecoins and I believe in a large part of the crypto world as well. Especially after what happened on TERRA and UST
Summary:
In this video, Task discusses the Trondale and the need for stablecoins to have utility beyond just being backed by fiat currency. He criticizes stablecoins like USDD for lacking utility and highlights the importance of building value for the backing asset. Task emphasizes the significance of focusing on different areas where stablecoins can be used, such as the derivative market, collateralization market, investing, and funding markets. He suggests that stablecoins like HBD should aim to become integral parts of these markets to achieve resiliency. Task warns against trying to shortcut the process of building a stablecoin and stresses the importance of nurturing it over time through the creation of a robust ecosystem that includes payment systems, shops, liquidity pools, lending platforms, and derivative contracts.
Detailed Analysis:
Task starts by addressing the reports about Trondale injecting 300 million dollars into USDD due to currency depreciation. He is not surprised by this but points out that simply backing stablecoins with fiat is not a sustainable approach. He references UST as another stablecoin facing similar issues.
He delves into the problem with USDD, mentioning that it went from being insignificant 60 days ago to a significant amount now. Task highlights his extensive study of stablecoins and the US dollar, emphasizing the lack of utility in the stablecoin market. He argues that simply providing liquidity pools or backing does not impart functionality or resiliency to the stablecoin.
Task explains that the key to stablecoins like HBD is to build value on the backing asset, in this case, Hive. He suggests that making Hive desirable with increasing value and utility is crucial for the stability of the stablecoin. He cautions against rushing the process and emphasizes the need for a strategic, long-term approach to building a stablecoin.
Furthermore, Task discusses various potential use cases for stablecoins beyond payments, such as the derivative market, collateralization market, and investment/funding markets. He envisions a scenario where HBD is integrated into these markets, facilitating billions or even hundreds of billions of dollars in transactions backed by HBD.
Task stresses the importance of adopting proven business-building strategies for stablecoins and warns against relying solely on tokenomics to solve issues. He emphasizes the necessity of establishing a diverse ecosystem around stablecoins, including payment systems, shops, liquidity pools, lending platforms, derivative contracts, and fund-raising initiatives in HBD to enhance resiliency.
In conclusion, Task criticizes Justin Sun for attempting to shortcut the process of building a stablecoin and suggests that his approach has led to producing a stablecoin similar to UST, predicting that it might crash. He signs off by wishing everyone a great day and hinting at discussing more in the next video.