Arthur Hayes Shares His Views on Stable Coins in the Cryptocurrency Industry
According to the news on March 9, Arthur Hayes, founder of BitMEX, wrote an article to express his views on the stable currency of the encryption industry. In t
According to the news on March 9, Arthur Hayes, founder of BitMEX, wrote an article to express his views on the stable currency of the encryption industry. In the article, he believed that there was no need for the super-mortgage stable currency such as MakerDAO and the algorithmic stable currency such as TerraUSD. The former was inefficient, while the latter was risky. The real reason why the market tended to store stable currency was that traders were allowed to trade between legal tender and cryptocurrency, so whether the stable currency was centralized or not was not important.
Arthur Hayes, founder of BitMEX, said that a centralized Bitcoin based stable currency NUSD should be created
Analysis based on this information:
Arthur Hayes, the founder of BitMEX, recently wrote an article expressing his opinions on stable coins in the cryptocurrency industry. In his view, there is no need for super-mortgage or algorithmic stable coins. Hayes believes that super-mortgage stable coins, such as MakerDAO, are inefficient, whilst algorithmic stable coins, such as TerraUSD, are risky. The main reason why these stable coins are stored in the market is due to their ability to allow traders to trade between legal tender and cryptocurrency. Ultimately, whether they are centralized or decentralized is irrelevant.
Hayes argues that the creation of super-mortgage stable coins, such as MakerDAO, adds unnecessary complexity to the stable coin market. He suggests that these coins are over-collateralized, with the minimum collateral requirement being 150%, which is inefficient. Hayes also notes that the incentive system in MakerDAO is poorly designed, which has led to the coin underperforming relative to other stable coins such as Tether.
Similarly, Hayes views algorithmic stable coins, such as TerraUSD, as risky due to their design. Algorithmic coins are created through incentives, such as increasing or decreasing the coin’s supply in response to its value. Hayes asserts that this design is flawed, as it leads to extreme price volatility. Furthermore, any operational issues in these coins can lead to the collapse of the entire system.
Despite his critiques, Hayes acknowledges that stable coins are popular due to their ability to allow trading between legal tender and cryptocurrency. He highlights that whether they are decentralized or centralized is ultimately irrelevant, and that the market will use whichever coin or system enables them to trade in the most efficient and secure manner. In other words, the success of stable coins is down to their functionality rather than their technical design.
In conclusion, Hayes’ article sheds light on the current state of stable coins in the cryptocurrency market. Although he critiques the design of super-mortgage and algorithmic stable coins, he acknowledges their popularity as a way to trade between cryptocurrency and legal tender. Ultimately, it seems the success of these coins lies in their functionality, rather than their technical design.
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