What is the best way to make a stablecoin which will stay stable irrespective of the market or any other factor?

  1. USDT -> Hard to believe someone is storing actual dollars somewhere.
  2. DAI -> What if for some reason ETH falls or Maker DAO gets wrecked?
  3. USDC -> What if actual dollar(fiat) fails ? or Some people say that they are very centralised? What if the US Govt decides to take down Circle or Coinbase what will happen?

1 Answer 1


Very interesting question!

I guess there is no final answer, but depending on what you are trying to achieve, a stable coin might not be a good fit it for. Stablecoins are conceptually 'cursed' to be attached to the market and other factors.

If you think well, the purpose of the stablecoin is just to represent the value of something else, therefore, it will always carry the same risks of that "something else" plus regulation related risks.

In the case of fiat-pegged stable coins, they will always carry the risks of the government interfering as well as the risk of currency's flotation.

In the case of asset backed stable coins, they will carry along the risks related to the asset's market plus liquidity related risks and so on, varying according to each case.

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