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Cardano Founder Hoskinson: Algorithmic Stablecoins Can Help Realize ‘Bitcoin’s Vision’

Press Releases Crypto News BeInCrypto Cardano Founder Hoskinson: Algorithmic Stablecoins Can Help Realize ‘Bitcoin’s Vision’

Cardano founder Charles Hoskinson believes that algorithmic stablecoins would help to achieve Satoshi Nakamoto’s vision for Bitcoin. According to him, banks will always let users down.

Hoskinson was reacting to Kraken’s CEO Jesse Powell’s observation that USDT’s value increased following the decline of rival USDC. According to Powell, this price movement showed that the crypto market was losing faith in US-based financial products.

In response, Hoskinson tweeted that he “believes that algorithmic stablecoins…are the most essential research stream to fully realize the original vision of Bitcoin.”

I still firmly believe that algorithmic stablecoins long term are the most essential research stream to fully realize the original vision of Bitcoin. Banks will always let you down as long as they are fractional reserve. https://t.co/zeQVSzhuaI

— Charles Hoskinson (@IOHK_Charles) March 11, 2023

What Are Algorithmic Stablecoins?

Algorithmic stablecoins are stablecoins designed to hold their peg through mathematical equations and incentives. Usually, these stablecoins are uncollateralized, and an algorithm controls their supply.

The defunct Terra UST was the most successful algorithmic stablecoin. At its peak, UST was a top three stablecoin, and its marketing supply reached over 17 billion. Eventually, the stablecoin witnessed a death spiral event that saw it lose its peg and led to its eventual demise.

Since then, several iterations of algorithmic stablecoins have emerged to varying degrees of success.

For context, Cardano-based overcollateralized stablecoin DJED has maintained its peg and is trading at a premium of $1.01 in the face of Go to Source to See Full Article
Author: Oluwapelumi Adejumo

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