- Cardano founder Charles Hoskinson believes despite the uncertainty surrounding algorithmic stablecoins they may be key to Satoshi’s vision.
- In response to USDC depegging, Hoskinson argued that banks will let users down as long as they are fractional reserve and algorithmic stablecoins are long term.
- Despite Terra’s UST collapse, Hoskinson is bullish on algorithmic stablecoins like Cardano network’s Djed.
Cardano network’s founder Charles Hoskinson is bullish on algorithmic stablecoins despite Terra’s UST collapse. Hoskinson believes stablecoins are the only ones that are key to Satoshi’s vision for Bitcoin.
Charles Hoskinson believes algorithmic stablecoins can realize Satoshi’s vision
Bitcoin creator Satoshi Nakamoto’s vision for the largest asset by market capitalization is key to the crypto ecosystem and its participants. Amidst the ongoing uncertainty in crypto, following the depeg of Circle’s stablecoin USDC and several other stablecoins, Hoskinson believes that algorithmic stablecoins like Djed could realize Satoshi’s vision.
I still firmly believe that algorithmic stablecoins long term are the most essential research stream to fully realize the original vision of Bitcoin. Banks will always let you down as long as they are fractional reserve. https://t.co/zeQVSzhuaI
— Charles Hoskinson (@IOHK_Charles) March 11, 2023
Charles argues that cryptocurrencies like Djed are the most essential research stream to fully realize Nakamoto’s plan for Bitcoin. Banks are fractional reserve and this makes them susceptible to “bank runs.”
Algorithmic stablecoins are designed to hold their peg through mathematical equations, and are typically uncollateralized. Djed is an overcollateralized stablecoin in the Cardano ecosystem, and an algorithm controls its supply.
In the face of tumultuous events since the past week, Djed has maintained its peg and traded at a premium, at $1.01 while USDC, FRAX, DAI struggle to hold their peg.
Hoskinson’s comments are in line with BitMEX co-founder Arthur Hayes’ recommendation that crypto market participants move away from stablecoins pegged to the US Dollar and fiat currencies. Hayes introduced the NakaDollar (NUSD) as the solution.