Be On the LookOut:
USDT, USDC, and BUSD are all in the top ten market cap. What do all these coins have in common? They're all completely centralized and, as the names imply, pegged to USD. The question we ultimately have to ask is, "How does USD maintain its stability anyway?" The answer could be contained in multiple tomes, but for the most part USD has a lot of liquidity, network effect, and derivatives connected to it.
Personally I believe that the next iteration of DEFI will usher in stable mechanics that will eventually end up crushing all utility USD has to offer. We are approaching a tipping point. USD will continue to get more and more volatile while crypto is going to get more and more stable. At a certain point all USD-based stable coins are going to completely collapse because the crypto version of stability is not only more stable, but actually decentralized and controlled by the underlying communities.
I suppose before we even get to that point though that algo stable coins will also have their time to shine. Does anyone know of a better algo coin than HBD? What a sleeping giant we have here. There are many on Hive talking about this, but do we have our blinders on? If HBD really THAT good? I mean we are still offering 20% yields and the sustainability of that mechanic shows no signs of toppling over. Impressive, to say the least.
But seriously though, does anyone know of any good algo coins? Cardano said they were making one. Unsurprisingly that project crashed into the mountain. Seriously does ADA do anything? The maximalists over there seem so absolutely delusional. Why would you want to hang your hat with a founder that thinks bending to regulations is super important? I dun get it.
In any case, the value of stable coins is undeniable. There is no contest when we see three centralized tokens in the top ten, pegged to dollars in a bank. At the end of the day stability is a required service in finance. There is no argument.
I wonder what happens when the bank ends of having a liquidity crisis. It's only a matter of time. Even though it's been algo coins getting destroyed in this most recent bear market, that doesn't mean that the alternative is somehow immune to the same problems of liquidity.
HBD does seem to offset any and all losses caused by currency devaluation. There's no way USD is losing 20% per year on average. In this sense it's quite superior than tokens pegged to dollars in a bank. There's simply no way to offer these types of yield offsets when money has to sit in a traditional bank.
Conclusion
Always be on the lookout for new iterations of stable coins. How they work is quite important. Liquidity is paramount. Note the collateral it uses and how that collateral and the stable version interact with each other. Elasticity is a concept that most people do not understand, especially in crypto where "21M" is seen as the proper way to store value. The idea that inflation should change based on supply and demand is completely foreign so far in this landscape.
However, once the floodgates open and a valid template has been found, it will be copied 1000 times over just like every other fad in crypto. Don't be surprised if one of the upcoming bull markets is a stable-coin bull market. We are also due for a gaming bull run, a social media run, and quite possibly even one fueled by AI. Take your pick. At a certain point they will start stacking one after the other once the number of devs in the space reaches critical mass.