Ethereum co-founder Vitalik Buterin recently spoke publicly again on the issue of decentralized stablecoins. In an article on the X platform, he stated that algorithmic stablecoins belong to "true DeFi," and offered specific insights into their design architecture and future direction.
Algorithmic stablecoins based on ETH have key advantages
Vitalik Buterin points out that if high-quality algorithmic stablecoins based on ETH exist, even if the vast majority of liquidity is supported by CDP (collateralized debt position) holders holding negative algorithmic USD, the ability to transfer counterparty risk to market makers remains an important characteristic. In other words, the core design principle of such stablecoins lies in the effective allocation of risk, rather than the complete elimination of risk.
Stablecoins supported by RWA are also possible.
Buterin further stated that even if algorithmic stablecoins are backed by real-world assets (RWA), as long as they can ensure sufficient collateralization even if a single RWA fails through over-collateralization and diversification, it represents an effective improvement in risk characteristics for holders. This view echoes the rapid growth of the current RWA tokenization market—statistics show that the RWA tokenization market has exceeded $23 billion, and analysts predict it could reach $16 trillion by 2030.
Moving away from the US dollar and towards a diversified index
More noteworthy is Buterin's view that the industry should gradually move away from using the US dollar as a pricing unit and towards more universal and diversified indices. This aligns with his views from January of this year, when he proposed that future stablecoins should track more resilient indicators such as global commodity baskets, energy prices, or custom consumer price indices (CPI), rather than simply being pegged to fiat currencies.
However, such attempts still face challenges in practice. Previously, Reflexer's RAI attempted to create a low-volatility token that was not pegged to fiat currency, but its market capitalization performance was far below expectations, indicating that the market's acceptance of stablecoins that are not pegged to fiat currency is still limited.
USDC deposits into Aave do not count.
Buterin specifically pointed out that depositing USDC into Aave does not currently fall under the category of decentralized stablecoins as he describes. This statement implies that, in his definition, true DeFi stablecoins need to achieve decentralization at the underlying architecture level, rather than merely using decentralized protocols at the interaction level.
The industry should move in these directions and gradually move away from using the US dollar as a pricing unit, shifting towards more universal and diversified indices.
It's worth noting that although the total stablecoin market size has exceeded $316 billion, the main driver of growth remains centralized stablecoins backed by fiat currency. The development of decentralized alternatives has been relatively stagnant, and Buterin's latest statement may inject new momentum into the discussion in this area.
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