RE: All in crypto? Are stable tokens secure enough for our life savings?
Regards esteemed friend @dana-edwards.
Stable refers to a value that remains constant or unchanged. Then c When we talk about stablecoins we must identify what is the form of support or reference taken to consider that stability.
Namely we can find three modalities:
Backed by Fiat.
If we pretend to be "all in crypto" this type of backup would seem a contradictory option.Backed by commodities or raw material.
When we talk about Gold support, for example, this would be a sensible option. Especially when the companies that issue their tokens allow periodic audits to certify their reservations. In Colombia there is a startup with a stable token backed by "Emeralds".Backed by Cryptoactives.
Stabilization scheme widely used but based on a very complex economic system. However, this system has the vision of detaching itself from the centralism of supporting stablecoin using fiat currency.
Definitely, Stablecoins are a sensible alternative when it comes to safeguarding our assets and keeping us "all in crypto."
Thanks for sharing.
Your friend, Juan
I pretty much agree. Backed by fiat when fiat itself isn't stable is not ideal and which fiat would you even choose because they all suffer from inflation. Backed by gold could be interesting but I think in the end it has to be backed by an array of different stable assets. It can include precious metals, it can include fiat, it can include crypto derivatives, but it's not likely to be just one stable asset to rule them all because nothing is truly stable as anything has the risk of crashing.
Thanks for your kind reply.
Oh, this sounds like something apocalyptic!
So what would be a sensible option?
Dai has remained stable (1: 1 with usd) since its launch.
Tether does not present this same case, although it is currently stable.
Personally I would choose some stablecoin backed by gold.
Which one did you choose?
No problem.
Portfolio theory shows me that to preserve wealth is mainly about managing risk. In coming up with a stable token I would suggest that the collateral or backing be diversified in such a way to spread the risks. So to put it all into one fiat is to back it in a political way and politics can change, fail, or anything could happen, so I would not think that is a good idea.
I think Dai actually has a good approach to it. They are going multi collateral which spreads the risk. I would go a similar route if it were my decision. As for what assets should make that collateral up I would say these should be swapped in and out according to calculations of risk.
Suppose we go with my real estate example? Real estate can charge rent. Rent can produce the equivalent of a dividend or interest. So this explains to you how a stablecoin can pay interest from the collateral.
I totally agree, the key is diversification.
And like everything in finance; it's about taking risks (in a good sense of expression).
Your real estate example reminded me that I recently read an article of my great friend @shortsegments, where he raised the theory of "debt good".
It is really possible to diversify to distribute the risk and at the same time increase the profit margins and the chances of success.
Thank you for your attentive reply dear @dana-edwards, you´re so kind.
Would you mind if I share with you some details about our nonprofit initiative based on STEEM Blockchain: "Project Hope" (@project.hope)?
Together with @crypto.piotr I've been working on it for few months already and recently we've launched our website. It's still kind of a "construction zone" :)
If you think so, could check it out: https://www.projecthope.pl/
You may find section "passive income" particularly interesting. Please, check it out and let me know what do you think. Your opinion would be a gold mine for me.
Your friend, Juan