July 8, 2022: Very Genius Stables 🧠💵
As more protocols launch their own stablecoins, a method for calculating utility.
In 2022, one of the better performing assets has been holding the good ole’ US Dollar. It’s only down somewhere in the ballpark of 8-25%, which is fantastic relative to the negative 90-100% you may have gotten trying to avoid inflation anywhere else.
Accordingly, triumphant DeFi protocols are flocking towards what’s working. Everybody under the sun is bullish on their own stablecoin.
Aave’s new $GHO is an overcollateralized, decentralized stablecoin. Given Aave’s pivotal role within DeFi and bespoke architecture, this appears primed to be a major winner within stablecoins. LF-GHO!
$GHO is already attracting shade from Liquity, so we know they’ve struck a nerve. We don’t have a dog in this fight, but we’re going ahead and heating up our popcorn.
It’s worth doubling down on this point — stablecoins are the killer application of cryptocurrency. Don’t take it from me, take it from giga-chad Sam Kazemian via threadmeister @SalomonCrypto
Consider some fun facts. The current market capitalization of Ethereum is $146B. The market cap of stablecoins on Ethereum is $91B, a value that’s held steady throughout the bear. You might say Ethereum’s “stablecoin dominance” metric is 62%.
Stats, as always, from the great DefiLlama.
What’s it all mean? What to make of all these new protocols, especially at a time when we know Curve has also been discussing launching a stablecoin.
We offer no particular alfa, but plenty of ill-informed speculation beneath the paywall.
Disclaimers! Despite a generous Liquity grant (forwarded to PAC DAO public goods), author has no stake in stablecoins mentioned above.