Unchained Here’s Why USDN De-Pegged From the Dollar – And Why UST Might Too - Ep.339
Apr 8, 2022
Kevin Zhou, co-founder of Galois Capital, dives into the turbulent world of algorithmic stablecoins. He unpacks the USDN de-pegging dilemma, revealing systemic flaws in its design and governance. Zhou also critiques UST's high yield offerings on Anchor and discusses how these unsustainable practices might lead to a similar fate. He elaborates on the proposed 4Pool on Curve, comparing it to other stable swaps, while raising concerns about potential market disruptions if UST were to falter. Tune in for an insightful look at the challenges facing the crypto market!
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USDN De-Peg
- USDN, a stablecoin in the Waves ecosystem, de-pegged from the dollar.
- A large address was manipulating the price of Waves through recycling and leveraging.
Algorithmic Stablecoin Failures
- Algorithmic stablecoins often fail because they try to generate value from nothing.
- Founders and investors profit from short-term pumps, despite the inherent risks.
UST and Bitcoin Backing
- Bitcoin backing reduces UST de-pegging risks, but the amount isn't sufficient.
- Anchor protocol's high yields create a large unwind risk for the Terra ecosystem.