The Stablecoin War Is Kicking Into High Gear

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Justin Sun entered the stablecoin race with a lot of publicity. Anything you can do, I can do better is the motto of Subby Boi. He is now over $200 million in coins along with the foundation holding a bunch of TRX to "back it".

In this video I discuss how this is what many are doing. They are trying to take a short cut to give their stablecoin value. They do not realize where that comes from and how to build a foundation upon which is construct one. We cover some of this in here.

▶️ 3Speak

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Yes, many are opting for stablecoins to regulate prices and avoid sharp falls in the market and thus not have so many losses. The most logical thing is that it should have a great support in another Cryptocurrency to make it much stronger.

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Yea I was always skeptical about the backed by some crypto that is unrelated to their chain. It's like they are thinking that the system will fail. I wonder how many of them will prevail and still exist in a few years.

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Summary:
In this video, the speaker delves into the concept of stablecoins and the importance of understanding where the real value of these digital assets comes from. He discusses the flaws in backing stablecoins with other cryptocurrencies, emphasizing the need for stability derived from supply and demand. The speaker highlights the significance of actual wealth in goods and services over the creation of money, stressing the necessity for stablecoins to be backed by real-world assets for sustained value. The importance of avoiding shortcuts in creating stablecoins is underscored as essential for long-term success in the market.

Detailed Article:
The video centers around the speaker's analysis of the current landscape of stablecoins and the mistaken approach many projects are taking in the realm of digital currencies. The video kicks off with a mention of Tron's new stablecoin, the USDD, which has amassed 200 million stablecoins with the foundation purchasing an undisclosed amount of TRX tokens to back it. The speaker expresses skepticism towards the current trend of building stablecoins backed solely by assets, such as cryptocurrencies, highlighting the fundamental flaw in pegging stablecoins to volatile assets like Bitcoin. He emphasizes the necessity for maintaining monetary elasticity driven by supply and demand dynamics rather than mere asset backing.

A critical point made by the speaker is his contention that stability in stablecoins should not be based on backing but should come from intrinsic value. He argues that currencies backed by real-world assets rather than other cryptocurrencies are more likely to maintain stable value in the long run. The speaker refers to the U.S. dollar and stablecoins like USDC and Tether, backed by the dollar or cash equivalents, as examples of stablecoins with a more reliable foundation compared to those backed by cryptocurrencies like Tron tokens.

The conversation transitions to the speaker's promotion of Hive-backed Dollars (HBD) as a stablecoin model that maintains stability through backing with Hive's native token. He elaborates on the process of backing HBD with Hive and the potential for HBD to accrue value through mechanisms like savings and earning interest. The speaker posits that creating real value in stablecoins necessitates looking beyond immediate backing and considering the underlying wealth in goods and services.

Furthermore, the speaker outlines a vision for establishing stable value through real-world wealth rather than the creation of money. He asserts that stablecoins should facilitate the exchange of goods and services effectively and that the focus should be on generating wealth rather than merely printing money. The speaker concludes by underlining the importance of avoiding shortcuts in stablecoin development and focusing on building value through real-world assets and services.

In essence, the video emphasizes the critical need for stablecoins to have intrinsic value derived from real-world assets and services for long-term sustainability and success in the evolving digital currency landscape. Through a comprehensive analysis of stablecoin dynamics and the pitfalls of current approaches, the speaker underscores the importance of creating stable value rather than relying on asset backing as the key to a stablecoin's viability in the market.

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