Not USDC - 8 questions on stable coins

I want to thank Robert Reed for answering my questions on stable coins.


The cryptocurrency sphere is changing rapidly and it is very difficult to learn on all new projects and catch up.


I now look different on stable coins and they probably have a place in the market.


Coinbase had a problem, they wanted to keep clients' money with them whenever clients had gone out of their investment crypto holdings and needed a stable holding. So, they have developed the USTC stable token which is pegged to the US$.


USDT was also such a stable token, but, they refused to an audit of their reserves.


USDC have agreed to do auditing. USDC invest with a monthly auditing and submit the findings to the public https://www.centre.io/usdc-transparency.


This is a very good way, but, still the ability to withdraw funds from the reserve is in the hands of the managers and while the auditing reports are great, this situation can be changed in minutes.


Tether has "mistakenly" minted 5 billion of new tokens https://www.ccn.com/tether-print-5-billion-crypto-error/.


USDC has the same ability to mint as much USDC as they wish. This is a very bad way of doing a cryptocurrency.


Coinbase are giving USDC to their client as part of their service. The ability to earn on stable coins is problematic. I mean that users willing to buy stable coins are losing money that will never get returned, and, the issuing companies have a profiting problem.


Uptrennd entrepreneurs got 1UPs for their initiative. If 1UPs will grow in price they will earn big amounts of money. This is the way that it is done with almost all cryptocurrencies projects. This cannot be done on stable coins because you need to form the reserve and the token is pegged to this reserve.


I am against the use of stable coins which:



  1. Have their reserve outside of the Blockchain.

  2. Can mint as much tokens as they wish

  3. They are minted by corporates wishing to make money.


Those three arguments are for my decision not to use USDC.


What about DAI?


This project is very interesting and there should be time invested into exploring it. Learn the whitepaper, the solidity smart contract and their formulas.


I hope that one Uptrenndian will invest the time with DAI – and give us his/her findings.


Arik Schenkler


A-Token an investment cryptocurrency – www.A-Token.org


 


 


 


 


 

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