| HN Mirror

It’s not a strawman argument to point out that at least 90% of stable coin transactions have major issues.

If there where better stable coins then presumably most people would use them, the simple fact that they aren’t is extremely damaging to any argument supporting the idea.

> If there where better stable coins then presumably most people would use them

That's not true. Tradable instruments generally accrue network effects based on snowballing liquidity and trading pairs as a result of being first to market, not because of the instrument's superiority to another similar instrument. You can see this effect in the traditional markets with SPY and VOO. VOO is an all-around superior product (much lower expense ratio, better company structure), yet SPY has 20 times higher volume due to its liquidity, especially options liquidity. Likewise, USDC is an all-around superior product to USDT, yet USDT volume is much higher due to its liquidity, especially across smaller trading pairs.

I also want to point out that when you choose to measure by volume, you over-represent the people who trade through Tether rather than actually holding it for any length of time because they believe it's a sound holding. When you are actively speculating on moonshots like so much of this hyped up market is right now, USDT is the best stablecoin for you due to its high volume and liquidity, but when you're looking for a trustworthy stablecoin to hold onto long term, there are other stablecoins for that that have less volume.

Finally, it's surprising to me that you're now basing your argument on the premise that most cryptobros are rational, because that seems to run counter to everything you're trying to argue in this thread.

SPY and VOO have a slightly different mix of stocks and VOO had a larger maximum drawdown at -19.58% vs -19.43%. It’s easy to argue that VOO is obviously better, but I don’t think that’s completely accurate.

More importantly even with the first mover advantage SPY is only twice the size of VOO rather than 10x the size of all competitors combined.

> SPY and VOO have a slightly different mix of stocks and VOO had a larger maximum drawdown at -19.58% vs -19.43%. It’s easy to argue that VOO is obviously better, but I don’t think that’s completely accurate.

We're really splitting hairs here. SPY and VOO don't have a "slightly different mix of stocks," they have an effectively identical mix of stocks. They use identical strategies to track an identical index.

The difference you're seeing likely comes down to the exchange traded product's discount/premium to NAV, or is the result of sheer chance due to slightly different timings of rebalancing, dividends, etc between the two issuers.

> More importantly even with the first mover advantage SPY is only twice the size of VOO rather than 10x the size of all competitors combined.

SPY is 20x the size of VOO by volume, which is the metric you're using to compare USDT to USDC. So by volume SPY is actually even more dominant over VOO than USDT is over USDC, not less.

All that said, even if what you were saying about SPY and VOO were true, I still disagree that it's logical to use an instrument's popularity as a proxy for its financial soundness.

> The difference your seeing

No, it’s both a different list and slightly different weighting. VOO 510 companies https://stockanalysis.com/etf/voo/holdings/

SPY 507 companies https://stockanalysis.com/etf/spy/holdings/

As to trading volume, 10:1 is comparing every stable coin. There are far more than just 2 mutual funds loosely tracking the S&P 500.

That data is out of date. Go directly to Vanguard's VOO page and you can see that they also hold 507 companies, just like SPY. But it doesn't even matter.

Even if the fund held 510 companies, those last three companies would each represent 0.00% of the fund's holdings. We're literally arguing over a 0.00% difference between two funds.

I also think that the difference between a comparison to total market volume and a comparison to a second competitor is immaterial to this conversation. It doesn't really affect any conclusions about anything.

In conclusion, we're so far off-topic that it may be best to call this thread quits.

bb88 1535 days ago

Again, you're saying I can't make an argument here. It should be as plain as day to everyone.

If a stable coin can be shady and still transact 90% of all stable coin market without any apparent consequences, then why should we trust any stable coin?

If a particular stablecoin can be shady and still carry a large amount of volume, why does it logically follow from that that no stablecoin should ever be trusted? The logic behind your assertion of cause and effect doesn't make any sense.

That logic is like saying 90% of torrent activity is related to piracy, therefore nobody has ever used the bittorrent protocol for any legitimate purpose. There is no logic in a statement like that.

Trust in stablecoins can be broken by the actions of any one stablecoin.

Trusting a specific stable coin can be independent of all other stable coins.