Last week, research firm Messari noticed that the value traded on stable coins now exceeds the value traded on ETH's Ethereum network.
In particular, there are two types of stable coins, bank stable coins, such as Tether, Paxos, TUSD and USDC, which are pegged to the dollar, and stable coins, such as Dai, which are encrypted. Together, they amount to $ 3.2 billion in Ethereum assets, and this figure is growing with an increase in the total value of $ 1 billion.
PARASITIC STABLECOINS ON ETHEREUM?
Ryan Sean Adams, founder of Mythos Capital, investigates the stable coin situation, concluding that it is not parasitic on Ethereum.
He poses the question that if stablecoins become the money within Ethereum, does ETH lose its monetary premium?
The first argument is that stable coins also alter the global properties of bitcoin transfer. Secondly, some stable coins, such as Dai, are good for ETH cash bonuses, and not for banks that reduce them.
Theoretically stable bank coins are calculated using the traditional dollar-backed financial system. This means that they are not resistant to censorship and are not expressive assets.
“They can’t serve as economic bandwidth for a trustless money system. They compete with digital dollars on Paypal more than they compete with crypto native assets like DAI, ETH, and BTC.”
If bank stablecoins are competing with the likes of PayPal then this is a win for Ethereum.
Adams designed this by adding that every use of a stable coin in an Ethereum smart contract will reduce the supply of ETH and decrease it. In addition, their use is attracting more and more people to the Ethereum ecosystem and increasing its demand.
The wider use of stable bank coins is also a more convincing argument in favor of the ERC-20 protocol, which is currently the industry standard. As a result, Ethereum standards are more likely to be integrated into stable currency banks such as Compound and Dai Savings Rate, which means more liquidity for ETH.
The result: more developers, more tools, better wallets, more protocols, more economical Ethereum economy.
“Perhaps this neutral settlement layer becomes so integral to global economic activity that it’s impossible for govs to ban—like the internet.”
In conclusion, stable coins are not parasitic to ETH, they are a serious cause for bulls. At the time of this writing, Ethereum was priced at $ 190, up 45% from the beginning of the year.