Algorithmic stablecoins are a false concept. In fact, the value of currency fluctuates tidalally, and this tide comes from people's approval and veto. Even gold cannot escape this law. Therefore, rather than using "algorithms" for "stabilization", it is more about attracting "herds" for "stabilization". So, how to attract the "herd"? We can see that whether it is UST or USDD, they are attracting people's convergence with high interest payments.

https://bitcointalk.org/index.php?topic=5400154.msg60220935#msg60220935As I said in this post, the biggest mistake of UST is the 20% super high interest rate of the anchor. But when we look back, maybe, it wasn't a mistake, it was probably DK's intention. He knew the pattern he had created would not last, and he looked forward to rug.

In fact, if we stick to the current model of algorithmic stablecoins, we're going to be in a ridiculous cycle. On the one hand, we entered the crypto world because of our natural distrust of the real-world financial system. On the other hand, we are still expecting the real-world financial system to firmly accommodate stablecoins in the crypto-world.


This leads to another larger question, and that is the definition of cryptocurrencies: Are they currencies or securities? Except for Bitcoin, I think all cryptocurrencies will be afraid to answer this question. Because this question points to the nature of the crypto world, which is them, is it a giant bubble?

Currently, I am rewriting an article based on the last discussion on algorithmic stablecoins, and I look forward to having more discussions with you.