[wyas]

Stablecoins are fundamentally broken and unsound. Ignoring the tech-stack that achieves price stability, and looking at them purely economically, the math simply breaks down.

This is a great writeup on Basecoin, but there's another player in town called Carbon (https://www.carbon.money/). Directly from their whitepaper:

"Carbon utilizes a decentralized schelling point scheme to achieve distributed con- sensus on Carbon’s exchange rate. Every 24 hours, also known as the rebasement period, a schelling point scheme is initiated where nodes submit bids for what they believe the true exchange rate of Carbon to be. Each bid is weighted by a collateral, denominated in Carbon. At the end of the 24 hours, bids are to- taled and the protocol takes a weighted average of the bids. Anyone who bids outside the 25th and 75th percentiles will have their balances slashed. Anyone within the 25th and 75th percentiles receive a normal distribution of the loser’s balances, with the highest reward distribution at 50% and normally diminishing on the right and left respectively"

This has security issues. Unless they own all the participating nodes, then -- as written -- this protocol has several ways that it can be gamed with enough Byzantine players so that the Byzantine parties are w.h.p. in between the 25-75 range and correct nodes are at the edges, which then get their funds slashed. They use several (also broken) mechanisms for contraction and expansion depending on the agreed-upon exchange rate, but supposing they are not broken, the true value of the coin can be gamed which then invalidates these mechanisms. We are truly so deep in mania.

EDIT: Also to add a bit more to Carbon: Hashgraph is also simply a BFT protocol that requires a permissioned setup. If we are going to deploy a smart-contract-enabled stable cryptocurrency on a permissioned network, then it is unclear why this complicated and unproven stack is even needed.

[zodiac]

> Stablecoins are fundamentally broken and unsound. Ignoring the tech-stack that achieves price stability, and looking at them purely economically, the math simply breaks down.

You seem to be making a claim about the space of all possible stablecoin designs, and then then proceeding to demonstrate weaknesses in one particular stablecoin design.

[JumpCrisscross]

Stable coins are unstable because they're inherently leveraged. This is a problem that traces back to the original "stable coin," bank deposits.

[darawk]

> Stable coins are unstable because they're inherently leveraged.

No they're not. Asset-backed Stable coins are not leveraged.

[zodiac]

First you must define what you mean by "stabecoin" and "leveraged". I can think of at least two definitions for each one that do not completely overlap.