Real World Asset Tokenization RWA’s Post

SECRET to make algorithmic stablecoins a SUCCESS are intraday interest rates Governments and regulators are trying to ban development of algorithmic stablecoins. Algorithmic stablecoins got a lot of hate after the Terra/LUNA collapse because UST was marketed as an algorithmic stablecoin but it was a scam. Algorithmic stablecoins use algorithmic methods to balance supply & demand to keep the peg to fiat currency. I think that the secret to make algorithmic stablecoins a success is the introduction of intraday interest rates. Protocol managing algorithmic stablecoins can change intraday interest rates - 1 second, 1 minute or 1 hour interest rates - to attract liquidity in order to maintain the peg. Market makers, liquidity providers, prop traders and hedge funds will be highly impacted by short term interest rates and they can bring liquidity to stabilize the algorithmic stablecoin and maintain the peg. Central banks do that today when they have a currency crisis but they can only use daily interest to maintain stability of fiat currency. Changing daily interest rates can be highly destabilizing for the economy because financial markets, debt and morgages are priced of daily interest rates. I’m super bullish on developments and research of algorithmic stablecoins but we have cracked it yet! #algorithmic #stablecoins #ust #usdt #centralbank #interestrates Follow 👉 Anton Golub & share ♻️ with your network

Brian Lo

Former - Group Head of Market & Liquidity Risk in DBS Bank (PhD 1990); Founder and Director, N-Category Advisers

8mo

Anton Golub that’s exactly why at some point there will be an intraday repo curve to the end of the day. No reason to stay flat unless everyone can tab the central bank discount window or intraday repo at the same rate no matter how long. And everyone knows the critical time stamp round the GMT clock for payment flows, algo stablecoins included.

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