Alternatives: Existing Stablecoins

Stablecoins are a crucial instrument in the crypto industry, serving as the primary trading pairs in both centralized and decentralized markets. Over 90% of order book trades and 70% of on-chain settlements are denominated in stablecoin pairs. This year alone, stablecoins settled over $12 trillion on-chain, making up 40% of total value locked (TVL) in DeFi and comprising two of the top five largest assets in the space. Furthermore, stablecoins have gained global product-market fit with over 100 million users, representing the largest addressable market and the greatest potential for revenue generation.

To address the growing demand, various types of fiat-pegged stablecoins have emerged, including centralized ones like USDT and USDC, and decentralized ones like DAI and FRAX. However, these stablecoins face challenges of manipulability and are backed by low-quality collateral. This compromises their ability to serve as the foundation for a truly decentralized finance economy, independent from control by larger authorities and governments.

Most existing stablecoins today are not sustainable due to the compromises made in the stablecoin trilemma. However, thanks to the latest advancements in the Bitcoin network, it is now possible to build a robust and scalable stablecoin that is censorship-resistant and capable of becoming the backbone of the decentralized economy.

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