sheva
@sheva
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760 Followers
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Stablecoins as the future of crypto is not necessarily a bad thing, but there are major trade-offs that we should be aware of. Pros: Price stability makes stablecoins an ideal bridge between the fiat and crypto worlds. New users are more comfortable using them. Faster adoption due to fixed value, suitable for payments, remittances, and DeFi. High liquidity: Many protocols and exchanges rely on stablecoins to keep the ecosystem liquid. Key risks: Centralization: Many major stablecoins (such as USDT, USDC) are controlled by centralized entities. This opens them up to the risk of censorship, fund freezes, and even political pressure. Systemic risk: If one major stablecoin fails, it can spread to the rest of the DeFi ecosystem (as almost happened with UST/Terra). Fiat dependence: Ironically, crypto, which originally set out to decentralize finance, is now back to relying on traditionally backed fiat assets 0 reply
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