When I was writing this article, I was on a plane, and I didn't know whether USDC would become more thoroughly unanchored or return to a 1:1 peg with the US dollar after I got off the plane. Of course, I hope for the latter - although I believe that centralized stablecoins should not have a significant impact on us in the ideal DeFi world, and although I have a more radical attitude towards decentralized DeFi, I pessimistically believe that the unanchoring of USDC has a devastating impact on the entire industry. I think we are far from ready to face this centralized blow at this stage.
In any case, stablecoins are no longer stable now, and we have to rethink how to view stablecoins.
Stablecoins are also an investment#
Perhaps before today, many, especially relatively cautious investors, could not understand this truth. But today, when the value of eggs in the basket begins to depreciate, when many people are trying to buy the dip after the unanchoring of USDC, this truth should not be difficult to understand. "Tomorrow we can still have assets of the same value as today" has always been a luxury assumption. In fact, if the value of the money we have tomorrow can be as much as today, it is already a successful investment, especially in this magical world today. However, the short-lived and false economic peace backed by the national bond system and banks has almost made us forget about this. Yes, not only stablecoins, but also fiat currencies are investments - you are investing in the reputation of a country and the reputation of the chosen bank - it is not difficult to understand that the collapse of banks, whether it is the Bank of Henan or the Bank of Silicon Valley, can cause risks.
Building a value circulation network that does not rely on stablecoins#
This is also what I most want to discuss in this article: fundamentally, what we need is the circulation of value, and this does not necessarily require stablecoins.
Perhaps we should completely abandon the illusion of stability. We can only achieve a certain degree of stability on the premise of providing a fixed amount of collateral. Any attempt to link it to the fiat currency system may be counterproductive, just like Dai became unanchored due to USDC as collateral. If we try to rely on the reputation of centralized institutions to jointly imagine an absolutely stable myth, it can only be playing with fire.
The reason why currency circulates and has value is not because of the currency itself, but because we can create value, and it is because we can produce things that can be exchanged that we have currency. So why not shout out loudly that we should "own" this value ourselves instead of letting banks or centralized institutions own it for us? We have relinquished ownership in exchange for stability, but in this ever-changing world, examples of not achieving stability even with the last resort of stability repeatedly mock us.
Giving up the illusion of stablecoins is not a terrible thing. Think carefully about why we need a stable currency. It is because the efficiency of barter is too low, and we need a stable and efficient medium of exchange. But doesn't Web3 naturally make the exchange of value more efficient? We can use NFTs or ERC20 tokens or any form to record the reputation of individuals, projects, or organizations on the chain, and then we can choose the value system we believe in. In addition, we can quickly define a part of our own value with Social Tokens... Web3 has given us tools to exchange other desired resources more efficiently, without necessarily relying on the intermediary of centralized stablecoins.
It is time for us to regain sovereignty over our personal value. We have assets because we are ourselves, not because banks endorse that we have assets. Wherever we go, we can quickly start new resource exchanges with our accumulations on the chain. From this perspective, I think the idea of giving up the stablecoin standard is not scary at all. On the contrary, it means that our relationship with the world is more open, and at the same time, we have not lost the efficiency of exchange brought by stablecoins. As for stability, I understand that you may worry that if it is not stablecoins, all your "assets" may be reduced to zero overnight. But we can believe in ourselves a little more - I must be able to create value, so I can definitely exchange for the resources I want. To be able to reach that world, we still need to explore together, but this is by no means a radical idea. Web3 has already given us this possibility, and we can have more confidence in our own power.
Finally, I want to mention that a large part of my salary is chosen to be received in RSS3 (not investment advice), because it is a value system that I believe in, and because I participate in the construction of the project behind it, I have partial ownership of its value system. As for USDC, I am just an object being manipulated in its palm. So in the long run, I think RSS3 is more stable than stablecoins.