MakerDAO and More: The Quest for a Stable Stablecoin Continues

Publié le by Coindesk | Publié le

One of a growing number of crypto tokens referred to as "Stablecoins," these cryptocurrencies are engineered to adjust their supply as the market shifts, issuing when prices rise and retracting when they drop, in an effort to keep their prices steady.

In this pursuit of stability, interest in refining the stablecoin technology seems to be on the rise moving into 2018.

Not only did an all-star group of investors, including Andreessen Horowitz and Pantera Capital, back a stablecoin project called basecoin in October, but CoinDesk has heard more such projects are on their way.

While Tether's U.S. dollar-pegged crypto has been around since July 2014, formerly under the name Realcoin, Bitfinex, under immense pressure after losing banking relationships and the ability to send fiat wire transfers, ushered in broader use of the Tether stablecoin in 2015.

Similar issues also haunted NuShares after its distribution of the NuBits stablecoin in 2016.

Even though the project set out to maintain the stability of the currency through economic incentives, following a wave of hacks and alleged manipulation of the peg by stakeholders, the stablecoin traded for as low as 10 cents the same year.

Christensen said, the tiny price fluctuations these stablecoins appear to have on CoinMarketCap don't translate to the price of the currencies on individual exchanges.

This volatility spooks crypto enthusiasts, who are worried about a potential "Black swan event" or a "Death spiral." In such a scenario, the asset a stablecoin is backed by suddenly falls, and in turn pushes the stablecoin down and with it the whole multi-billion dollar crypto market.

As these technologies advance, stablecoin creators are building in precautions.

"Really early-stage markets for a new stablecoin are definitely some of the weirdest market conditions," Christensen said.