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New Stablecoin Players Battle: GHO, crvUSD, Dinero, dpxUSD Who will win?

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The Stablecoin war could be the next stage in the battle to capture market share and real-world utility

Stablecoin wars: analysis on the present and future of stables

Chinchilla, encryption researcher

原文编译：深潮 TechFlow

Stablecoins are one of the greatest innovations in cryptocurrencies. But when the New Year comes, how will the stablecoin landscape change?

, GHO

, crvUSD

, Dinero

, dpxUSD

Stablecoins can be used to attract users to DeFi. Moreover, it can attract liquidity to the original protocols that issue them. In fact, in order to increase the protocol's revenue (and perhaps the Token price), it may be crucial to gain dominance in the number of native stablecoins.

So first, a quick overview of what's going on. As Dune data analysis notes, fCod-backed stablecoins are by far the most widely used, compared to cryptocurrency-backed and algorithm-backed stablecoins.

But they still took a beating in the bear market.

More specifically, although BUSDs saw considerable gains in 2022, USDT and USDC trended downward, and the recent FUD targeting Binance cost it billions of dollars in total supply.

However, about 92 per cent of dollar-pegged coins are backed by centralised entities.

In addition, decentralization and algorithmic stablecoins took a big hit in terms of trust after the Luna crash. While their market caps don't match those of the more centralized currencies, the DAI, LUSD, FRAX and MIM have struggled to keep up.

And let's not forget other failures, like:

, Neutrino usd (USDN) by Waves;

, Near Protocol USN;

, Tron's USDD.

So, now that we've seen what's going on, let's take a look at some of the protocols designed to win market share against centralized stablecoins.

Aave $GHO

Aave is one of the foundations of DeFi. Even at this stage of the bear market, its TVL could hold up at $5.86 billion. Over the summer, Aave announced that it would launch a governance-managed stablecoin, GHO, that backed excessive mortgages.

The "Facilitators" will be able to cast and burn the GHO and they will be managed by the Aave Governance. In addition, users holding Aave tokens will be able to mint GHOs at discounted rates. The agreement will be based on the concept of arbitrage to keep the price of GHO stable.

Moreover, it does not rely on external price prognosticators. I know that sounds scary after the UST crash, but the mechanics are quite different.

The UST arbitrage is based on its own balanced volatility asset (Luna), while the GHO will be over-collateralized by a basket of tokens.

$crvUSD for Curve

Curve is another milestone for the cryptocurrency ecosystem. It ranked second among all DEFIs in terms of volume, reaching US $1.36 billion in seven days, or 22 per cent of the total market.

Similar to Aave, they announced a new stablecoin last summer called crvUSD.

The founders confirmed that crvUsd would be over-pledged. But the Curve team has two impressive innovations. One has already been published in a white paper, while the other is rumored:

, LLAMA (debit-clearing AMM algorithm);

, Supported by LP.

LLAMA will enable a continuous liquidation mechanism for debt positions (stablecoins). This means that, unlike Dai, in the event of a shock event, the collateral position will be gradually unwound in the event of a shock event. This smoothing process protects against losses in market fluctuations.

crvUSD is over-mortgaged by tricrypto2 and 3pool. This is just speculation, but rumors are growing that crvUSD will be backed by Curve's liquidity pool:

· tricrypto2:It consists of the USDT, wBTC, and ETH.

· 3pool:It consists of DAI, USDC and USDT.

Redacted Cartel's $Dinero

A group called Redacted Cartel announced a few months agoThey will launch their first stablecoin: a stablecoin fully backed by Ethereum's excess collateral.

They said it would be done in phases, with the first phase rolling out in 1Q23.

As you may know, the Redacted ecosystem gives the DeFi agreement on-chain liquidity, governance and cash flow. So perhaps incentives will be the key to this stablecoin.

$dpxUSD for Dopex

Dopex is one of the most interesting options agreements in cryptocurrencies. It is based on Arbitrum and is constantly innovating. While we don't know exactly when, the team has announced that dpxUSD will be available in the future.

DpxUsd will be supported by:

, 75% USDC

, 25% rDPX

The stablecoin is minted by combining the rDPX with the USDC into a liquid pair, thus providing an incentive for minting it in the form of a discount.

But what happens if a decoupling event occurs? There are three possibilities:

, The agreement removes dpxUSD from the LP, forcing the pool to rebalance its hooks.

, Whales intervened by buying dpxUSD, although this would be based on trust.

, In the event of an extreme event, dpxUSD will be redeemed at a discount to the underlying asset (0.75USDC + 0.25rDpx).

The last strategy will have arbitrage opportunities because the underlying collateral has been earning and should be worth more than the dollar value of its dpxUsd.

summarize

That's an overview of the upcoming Stablecoin. But we should not forget the recent projects already on the market, such as Frax Finance (FRAX) and Liquity (LUSD) :

, Frax is a stablecoin partly backed by collateral and partly backed by algorithms;

, Lusd is supported by ETH.

In a word,History tells us that decentralized stablecoins often fail or have to change their mechanics.Or meet what happened after MakerDAO broke DAI in the March 2020 crash. That's why they switched from 100% ETH support to about 50% USDC.

Therefore,While some of these agreements have a "long" history of deploying incredible solutions for DeFi, we should always bear in mind that innovation is always risky.And, over the next few years, regulation of the asset class will come.

That said, all of the protocols I've listed are trying to radically innovate cryptocurrencies. We haven't seen a major Token offering of stablecoins before, or a multi-billion TVL lending dApp launching stablecoins. All of these innovations are trying to revolutionize the industry.

We are used to the Curve battle for liquidity and voting rights. But the Stablecoin war could be the next stage in the battle to capture market share and real-world utility. Our purpose is to take power away from a centralized entity and give it back to a decentralized entity.