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!

45:00

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Episode guests

Kevin Zhou

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Episode notes

Intro

2min

The Rise and Fall of USDN: A Cautionary Tale

11min

Enhancing Stablecoin Systems

7min

The Stability Dilemma of Stablecoins

11min

Crypto Chaos: Tensions and Hacks

8min

Cryptocurrency Market Developments

6min

Kevin Zhou, co-founder of Galois Capital, discusses a crazy week in the world of algorithmic stablecoins that saw USDN de-peg from the dollar and Terra unveil plans to create a new liquidity pool on Curve to strengthen UST. Show highlights:

how USDN and Waves works
what made USD de-peg
why Kevin thinks algorithmic stablecoins fail so often
what Kevin thinks about backing UST with BTC
how 4pool works in the context of Curve Finance, 3pool, UST, Frax Finance, and Redacted Cartel
why Kevin believes Anchor is the reason UST could de-peg
what might happen to Terra and the crypto market writ large if UST were to de-peg
why lowering yields on Anchor could depress LUNA’s price by 8x
how UST and LUNA redemptions work

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Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

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Galaxis: https://galaxis.xyz/

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Kevin Zhou