Should stablecoins rely on perception and confidence?
Daniel Engels
3 replies
Most tablecoins rely to a large extent on perception and confidence.
The recent Terra crash showed how fast their market value might plummet to zero. Proponents might argue that it's the same story for fiat money, which are no more 100% backed since the 1970s.
Do you think stablecoins are legit?
Replies
Ezzat Suhaime@ezzat
I guess it would be based on research. Is the protocol promising crazy staking rewards? If so, probably a ponzi. This is just one red flag.
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They're only as good as the people behind them, and even the most well-intentioned and well-run stablecoin projects are ultimately dependent on the faith and confidence of the people using them. If that faith is ever shaken, the value of stablecoins can plummet just as fast as any other cryptocurrency.