The regulation of stablecoins will need to come from within the cryptoverse since that is where the risk of loss is greatest. After all, we have the most incentive to get it right and lose it all if we're wrong.
Cryptocurrency is still a young market, and stablecoins is even younger. We're still in the trial-and-error phase of development, and errors there will be-- sometimes, very painful errors which hit home.
One approach is to let the various stablecoins come up with their own ways to prevent the UST Scenario from repeating again and see which ones succeed and which ones fail. Over time stablecoins will acquire a track record for performance in light of adverse conditions or black swan events. Those which handled things well will be rewarded with continued usage. Those which failed will join UST. Perhaps in this way HBD will rise to the top.
There will be mistakes, of course, but those who manage billions of dollars don't have the luxury of making simple mistakes. It is not acceptable for an entity to be such garbage.
Regulation should already be in the crypto industry. But how?
There will be mistakes, of course, but those who manage billions of dollars don't have the luxury of making simple mistakes.
They don't have that luxury, which is why they do their due dilligence. This is why thy do research to make sure the chances of success outweigh the risk of failure. Even then, there is no guarantee that ventures receiving their capital exist long enough to provide ROI. This is why one successful venture can more than compensate for many failures combined. Ideally all ventures receiving this capital succeed, but more common is failure.
Regulation should already be in the crypto industry. But how?
In an evolving industry, regulation is established from the bottom up by those who participate. No one knows what rules work because none had existed, so the rules are developed over time via trial and error. Given how quickly things move in the crypto space, these rules won't take long to make themselves obvious to participants.
If anything, we take a set of rules tested in a field where they are known to work; then we apply that set of rules here. We keep those rules which work. Those which don't work get modified as needed or trashed altogether. Along the way new rules are adopted.
Every social venture need rules in order to ensure the greatest amount of success and satisfaction. In other words, every social group needs governance. There is no escaping this.
So the question becomes this: Do we allow this governance to come from a political form or government, or do we let it arise organically from those who are directly involved in the space? Given what the former has done wherever it has been tried, I choose the latter. Others may go with the former. Either way, there is risk involved. Either way, are we willing to pay the costs involved with each choice?
I agree with most of what you said, the insiders of the crypto market will find solutions to many things. I am already against the intervention of the central authority in the decentralized market.
But the liquidity problem need not be reinvented. It's okay for the price of LUNA to drop, every crypto goes up or down. But I can't say the same for stablecoin. There should be no liquidity issues in stablecoin. If there is such a problem, it can be solved by intervention from the beginning.
Even I am prepared as if there will be a crisis in the markets at any moment. It is selfish that platforms that manage billions of dollars are not ready for this. Is it normal for the Terra foundation to sell LUNA when the markets are down hard? Didn't they know this was going to turn into selling pressure? I don't think these are mistakes that can be ignored.
Yea and I see a lot of people saying algorithmic stable coins have never fully worked. I guess the biggest issue is whether or not there is enough to cover all the debt created.
Stablecoins are now in the spotlight.
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A regulation regarding stablecoins is necessary, a serious loss of trust has occurred.
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The regulation of stablecoins will need to come from within the cryptoverse since that is where the risk of loss is greatest. After all, we have the most incentive to get it right and lose it all if we're wrong.
Cryptocurrency is still a young market, and stablecoins is even younger. We're still in the trial-and-error phase of development, and errors there will be-- sometimes, very painful errors which hit home.
One approach is to let the various stablecoins come up with their own ways to prevent the UST Scenario from repeating again and see which ones succeed and which ones fail. Over time stablecoins will acquire a track record for performance in light of adverse conditions or black swan events. Those which handled things well will be rewarded with continued usage. Those which failed will join UST. Perhaps in this way HBD will rise to the top.
Posted Using LeoFinance Beta
There will be mistakes, of course, but those who manage billions of dollars don't have the luxury of making simple mistakes. It is not acceptable for an entity to be such garbage.
Regulation should already be in the crypto industry. But how?
Posted Using LeoFinance Beta
They don't have that luxury, which is why they do their due dilligence. This is why thy do research to make sure the chances of success outweigh the risk of failure. Even then, there is no guarantee that ventures receiving their capital exist long enough to provide ROI. This is why one successful venture can more than compensate for many failures combined. Ideally all ventures receiving this capital succeed, but more common is failure.
In an evolving industry, regulation is established from the bottom up by those who participate. No one knows what rules work because none had existed, so the rules are developed over time via trial and error. Given how quickly things move in the crypto space, these rules won't take long to make themselves obvious to participants.
If anything, we take a set of rules tested in a field where they are known to work; then we apply that set of rules here. We keep those rules which work. Those which don't work get modified as needed or trashed altogether. Along the way new rules are adopted.
Every social venture need rules in order to ensure the greatest amount of success and satisfaction. In other words, every social group needs governance. There is no escaping this.
So the question becomes this: Do we allow this governance to come from a political form or government, or do we let it arise organically from those who are directly involved in the space? Given what the former has done wherever it has been tried, I choose the latter. Others may go with the former. Either way, there is risk involved. Either way, are we willing to pay the costs involved with each choice?
Posted Using LeoFinance Beta
I agree with most of what you said, the insiders of the crypto market will find solutions to many things. I am already against the intervention of the central authority in the decentralized market.
But the liquidity problem need not be reinvented. It's okay for the price of LUNA to drop, every crypto goes up or down. But I can't say the same for stablecoin. There should be no liquidity issues in stablecoin. If there is such a problem, it can be solved by intervention from the beginning.
Even I am prepared as if there will be a crisis in the markets at any moment. It is selfish that platforms that manage billions of dollars are not ready for this. Is it normal for the Terra foundation to sell LUNA when the markets are down hard? Didn't they know this was going to turn into selling pressure? I don't think these are mistakes that can be ignored.
Posted Using LeoFinance Beta
Yea and I see a lot of people saying algorithmic stable coins have never fully worked. I guess the biggest issue is whether or not there is enough to cover all the debt created.
Posted Using LeoFinance Beta