re: Official CryptoTalk Thread

quote:

---

I know people like UST/Luna because of the returns, but honestly it seems really unsustainable. Anytime there's a big dip in the market, a billionaire fund has to dump tons of money to keep the peg.

I wish the entire crypto space would move to using $RAI as a stablecoin. It's the first crypto-native decentralized stablecoin, only backed by ETH. It's an algorithmic token so it comes with risks, but it generally holds its peg really well and auto-corrects if peg fails. It's not pegged to USD, but to itself (more or less)

---

Rai will fail too if it gets enough volume.

UST will likely return to peg, but it might take a few days. One of the issues currently with algo stables is that they can’t adequately keep the peg on centralized exchanges and swap sites. During all of this, UST was still at peg on chain LINK, but was obviously depegged on the centralized exchanges and eth swap sites. It becomes a liquidity issue on those sites which is why the billionaires have to keep propping it up.

And once that depeg happens on the exchanges, fud spreads and it exacerbates the issue there, causing the drops we’ve seen with Luna and UST.

And I don’t know what would actually fix this issue besides all trades being made on chain, which I don’t see happening