Babbitt Column | The market lacks a stable income stablecoin

USDT has been the leader of stablecoin for many years, and everyone in the currency circle has been bearish and has always disappointed everyone.

USDT's total supply now amounts to $ 4.1 billion. The second stablecoin USDC total supply is 460 million. Ranked third is total PAX supply of 220 million. The fourth is TUSD, with a total supply of 150 million. The fifth Dai is 100 million. Among the top five, USDT has an absolute lead, accounting for more than 81%.

From the perspective of the effect of anchoring the US dollar, USDT also has a slight advantage. The following figure shows the nearly one-year price curve of USDT and USDC against the US dollar.



From the perspective of the price curve, USDT anchored USD is significantly better than USDC, and the advantage over other stablecoins is even greater.

USDT also has more disadvantages than other stablecoins, haha. In particular, USDT has no evidence to show that it is a 100% reserve fund and it has been pursued by the US government.

But why USDC, PAX, etc. can't beat USDT. These are legal, regulated stablecoins.

Now there are so many stablecoins, and the design ideas are similar. Basically, they use the US dollar as a 1: 1 token for guarantees. Dai notified the smart contract and used the excess ETH assets to mortgage the stablecoin.

But since it is a stable currency, it should be the same as a fiat currency in economics. Fiat currency has interest, so why don't stable currency create an interest-bearing currency?

There is a lack of stablecoins with interest in the market.

Users who purchase stable currency legal currency assets and deposit them in a bank will generate interest. However, these interests are not distributed to users. We deposit money in Yu'ebao and have an annualized interest of about 3%.

The stablecoin should take out the margin deposit interest and share it with users. This may be a key factor in competing with USDT.

As the competition becomes more and more fierce, the stablecoin with a certain profit is bound to come.

There are two ways to design a stable return stable coin. One is to take out the interest on margin deposits, issue stablecoins, and airdrop to currency holders based on the address balance. For example, monthly airdrops.

An airdrop-type stablecoin will cause a small problem, that is, the price will definitely rise before the airdrop time. Because everyone buys to get airdrops. However, you can take the currency age into consideration and airdrop each month according to the currency age, and clear the currency age with each airdrop.

Another design method is to design stable coins into stable value-added coins. From the beginning of the issue date, 1: 1 is equivalent to the US dollar, but after the issue, it starts to appreciate steadily. For example, the annualized interest rate is 4%, and the average value appreciates every day.

Appreciation means that the acceptor promises to exchange with the user at the appreciation price.

Stable income stablecoin, how does it sound like stablecoin, maybe it should be renamed as stablecoin.