Regulations are like glaciers. Because of their incredible weight, these massive bodies move slowly but shape the terrain underneath. The fjords, lakes and valleys carved as the ice sheets advanced or receded have sculpted the landscapes upon which the global economy was erected. Even in the world’s freest markets, statutes and standards have similarly profound effects. Government protocols provide the topography that we navigate while maximizing our various objective functions. Glaciers and policymakers are typically unrushed, but environmental changes can quicken their pace.
As our lives are increasingly spent online, supervision has transcended into the digital realm. Laws regarding data collection, content moderation and rights management have been introduced to protect users, while trying to foster an environment where innovation can thrive. The advent of bitcoin introduced the idea of web-native money, which has the potential of undoing what Marc Andreessen calls the internet’s original sin. Borne out of a frustration towards a financial system deemed corrupt with regulatory capture and greed, the supply of this digital currency relies on cryptography and algorithms to manage supply. Demand is, like the modern monetary system, based on belief.
Humanity’s story has been moulded by glacial forces and the digital asset markets have been marred by regulation.
In the early days, purchasing BTC occurred via P2P mechanisms like PayPal. As scammers entered to take advantage of the market’s opacity, the earliest exchanges were borne. Unfortunately, the pioneer venues like Mt. Gox were still subject to criminal activity as frequent hacks drained accounts. Litigation was commonplace too because authorities deemed the businesses to be in violation of money transmission or laundering laws. Many failures came to pass. The heightened oversight made it difficult for exchanges and other crypto-related firms to open bank accounts, so capital flowed to friendly jurisdictions. Constraints associated with these new domiciles required creative funding operations, but ingenuity found a way to accept fiat transfers. Motivations like avarice and frustration towards the traditional financial system upheld demand for bitcoin, which drove prices higher and spawned innovations. New blockchains, like Ethereum, were developed. The smart contract set off an explosion of controversial Initial Coin Offerings, providing capital for projects of sometimes questionable or abject quality.
More speculators entered the market to pursue these Alt Coins. When exiting their holdings, traders would often rotate into BTC because it was the least volatile cryptocurrency and many exchanges either did not allow fiat on the platform or took a large fee from the transfer into traditional currency. Out of this grew a need for an on-chain asset that could serve as cash. These early crypto holders longed for a safe haven in the event of a market decline or crash. If the price of bitcoin began to drop rapidly, a holder wanted to convert their holdings to some cash-like asset on a single platform to avoid potentially massive losses. In 2014, the first of these stable tokens was released as Realcoin and shortly renamed as Tether (USDT).
Despite having to contend with numerous legal challenges, USDT enjoyed its first-mover advantage for several years. Interestingly, while digital asset markets have been founded on the principle of decentralization, Tether remains a closely-held entity whose disclosure has, to-date, been selective. USDT was initially plugged into the American financial system through Taiwanese banks, but eventually their transfers were blocked, forcing the group to domicile in kinder jurisdictions. Tether’s been hit with numerous lawsuits and fines nearing $100M in total. Among the charges are allegations of misrepresenting its reserves. As a result of this controversy, new challengers have emerged to serve as steady assets in an otherwise tumultuous marketplace.
The name “stablecoin” is somewhat self-explanatory, but what does it really mean and how does it work? It turns out that the intrepid spirit we’ve witnessed across the internet has also taken interest in these seemingly boring assets, whose price is intended to be fixed. Let’s dive in.
Fiat-backed stablecoins are supported to maintain a 1:1 ratio, meaning that one stablecoin is equal to one unit of currency; typically, the USD. As such, for each stablecoin that exists, there is (theoretically) an equivalent balance of fiat held in a bank account. Often, token issuers have a mechanism to permit the exchange of the digital asset for hard currency. Of course, such a transaction would be subject to compliance with the necessary KYC/AML legislation. When someone wants to redeem for cash, the entity managing the stablecoin will transfer the necessary amount of fiat into the client’s bank account. The equivalent number of stablecoins are then “burned” or permanently removed from circulation.
- The principal advantage of this approach is that it’s relatively easy to understand. Most consumers today have more of a digital relationship with money and this is hardly a departure from that.
- On the other hand, holders must place a great deal of trust in the issuer with respect to the promise that their tokens are actually funded by a commensurate balance of fiat. As mentioned, Tether has come under scrutiny in the past regarding the opacity of their reserve disclosure and recently hedge funds have placed bets that the assets backing the tokens are worth less than $1.
- Others have favored a more transparent approach, publishing audited assurance of the 1:1 ratio and willingly engaging with regulators. Among them is Circle, which issues USDC in partnership with Coinbase and has been approved for settlement on the Visa network. In contrast, Tether famously didn’t send any representation to the US Congress’ Financial Service Committee’s hearing on stablecoins.
- Other fiat-based stablecoins are in circulation, but USDT and USDC dominate the landscape. Their combined capitalization is greater than the rest of the market combined.
Some groups have elected to create other asset-backed offerings pegged to the value of real-world goods. Digix Gold (DGX) is built on the Ethereum network but suspended operations earlier this year. The token was secured by physical gold, where one DGX represented one gram of the yellow metal, though holders were required to be in Singapore to carry out an exchange. Tether, Paxos and others have similar tokens. Alternatively, SwissRealCoin (SRC) is backed by a portfolio of Swiss real estate and permits owners to vote on the investment decisions of the fund.
A few years after Tether’s ground-breaking introduction, MakerDAO launched the first crypto-backed stablecoin – Dai. Previously this was a more centralized endeavour, but the governance now rests solely with the DAO. Because you can see the wallet holdings on blockscans, the reserves for crypto-backed stablecoins provide an improved level of transparency. However, due to the inherent volatility in most digital assets, to maintain a 1:1 peg, the backing requires overcollateralization of 1.5:1 - 2:1 to provide adequate assurance. Users who deposit Ether (or other tokens accepted as collateral) can borrow against the value of their deposits and receive newly generated Dai. This is relatively capital intensive and can still result in de-pegging. On Black Thursday in March 2020, a tail-risk event caused a momentary increase in the DAI price (triggered by an ETH price crash and a clogged Ethereum network) which led to $8M worth of liquidations. Following a governance change, subsequent de-pegging will see Maker’s governance token MKR minted and sold on the open market to raise collateral. It’s worth noting that, while decentralization provides some benefits, DAOs have governance issues of their own.
An emerging alternative that is rapidly gaining adoption is the algorithmic stablecoin. Instead of using cash or crypto reserves, this controversial model uses codified rules and an associated reserve token to peg a stablecoin; most often, to USD. These tokens are considered the most decentralized, as they do not rely on a single entity to maintain the collateral. For the non-quantitative, these coins are the least transparent because the algorithms are difficult to decipher. Terra’s UST is the leading “seignorage” stablecoin. Through the Chai network/app, millions of Koreans transact in TerraKRW (KRT), which is accepted as payment at thousands of real-world merchants. Recently, UST has surged to be the #3 stablecoin by market cap. The popularity has largely been fueled by lending rates on the affiliated Anchor Protocol, which (until recently) has provided APYs of ~20%. However, many question the sustainability of this model. While the UST/LUNA pair have survived several market routs, other algo-pegged projects haven’t been so lucky. There have been numerous exploits and capital flights which resulted in significant losses. Notably, the Iron/Titan Finance debacle from last year:
Trust is an essential component of any financial system. A traditional bank is often levered 8x – 10x, which effectively means that for every dollar their clients deposit the financial institution will issue $8 - $10 of loans. Should depositors begin to fear that the credit book is experiencing losses, then they’ll ask to receive their savings in cash, sparking a “run on the bank.” In the extreme, a situation can arise where the lender cannot satisfy the withdrawals and if they’re unable to raise equity capital, they fail. This happens more frequently than you might think.
UST sahipleri, tokenlarını dolar karşılığı Luna bakiyesi ile değiştirebilirler. Eğer sürü psikolojisi baskın gelir ve insanlar aynı anda büyük miktarlarda UST bozdurmaya çalışırsa, piyasaya ciddi miktarda Luna arzı girecek ve fiyatı aşağı çekecektir. Çıkış kapılarına hücum devam ettikçe, sürekli artan miktarda Luna tokenı basılacak ve bu da şu durumla sonuçlanacaktır: “ölüm sarmalı.” Yukarıdaki Titan görselinde yaşanan durum tam olarak budur ve burada da açıklanmıştır:
Son zamanlarda, algoritmik coinlerin sabit değerini koruyan rezerv havuzlarıyla ilgili bazı yenilikler yapıldı. Teminatı diğer dijital varlıklarla veya karbon kredisi gibi ESG odaklı varlıklarla çeşitlendirerek, ek bir güven ortamı sağlanması amaçlanıyor. Bazı olumlu gelişmelere rağmen, bu mekanizmaların refleksif yapısı, geleneksel finans dünyasındaki birçok kişiyi sistemik risk konusunda endişelendiriyor. DeFi popülaritesini artırmaya devam ediyor ve yeni stablecoinlerin sayısı da hızla yükseliyor. Örneğin, NEAR ve TRON bu hafta algoritmik tekliflerini duyurdular ve ayrıca sayısız Olympus DAO çatalıbulunuyor. İtibari para birimleri gibi, bu protokollerin tümü istikrarlı olmayı hedefler ve güven ile faiz oranlarının çarpıştığı bir savaş alanında likidite için rekabet ederler. Sermaye mücadelesi kızıştıkça, kaldıraçlı bir sistemde yaşanacak bir güven kaybı, bu kodlanmış tokenlardan birini veya birkaçını çökertip ciddi yayılma etkilerine yol açabilir.
Düzenlemelerin tüm bu süreçte oynayacağı bir rol var. Sabit coinler pazar payını çok hızlı bir şekilde ele geçirseydi, bu durum geleneksel bankacılık sisteminde likidite endişelerine yol açabilirdi. Politika yapıcıların merkeziyetsiz bir token tarafından desteklenen bir algoritmayı zorlaması yasal açıdan güç olsa da, token ihraç ederken nakit (veya nakit benzerlerini) bünyesinde tutan bir şirket, geleneksel bir finans kuruluşuna benzemeye başlar ve bu durum onu yerleşik denetleyici kurumların yetki alanına sokar. Circle gibi liderler, kurallara göre oynamaya istekli olduklarını iddia ediyor, ancak belirsizlik, gelecekteki büyüme ve inovasyon için önemli yatırımlar yapmayı zorlaştırıyor:
İlerleyen bir buzulun yarattığı yaklaşan tehdit, (merkeziyetsizlik maksimalizmiyle birleştiğinde) inovasyonu ulus devletlerin para birimlerine duyulan güveni kopyalamaya iten teşvikler yaratıyor. İronik bir şekilde bu durum, dijital ekonominin istikrarsızlaşmasına yol açabilir veya başarılı olması halinde gerçek dünya sistemini sarsabilir. Ancak, karşılaşılan zorluklara rağmen, bazı köklü finans kuruluşları iç içe geçmiş bir geleceğe yatırım yapmaya devam ediyor. Blackrock, Circle ile stratejik bir ortaklık imzaladı ve bu ortaklık kapsamında dünyanın en büyük varlık yöneticisi, USDC'nin nakit rezervlerinin birincil yönetimini üstlenecek ve token için “sermaye piyasası uygulamaları” keşfedecek. Müşterilerinin artık 401(k) emeklilik hesaplarında bitcoin tutabileceğini duyuran Fidelity, bu gelişmeyle birlikte, yatırım turuna da katıldı.
Merkez bankacıları durumu fark etti ve dünya genelinde dijital para birimi girişimleri araştırılıyor:
Uluslararası Ödemeler Bankası birkaç hafta önce DeFi ve para sistemi üzerine bir konferansa ev sahipliği yaptı. Panelistler, dijital ekonominin durdurulamaz bir güç olduğu konusunda hemfikirdi. Düzenlemelerin, politika yapıcıların muhafazakâr konfor alanlarının dışına çıkmalarını ve geleceğin nasıl görünebileceğine dair kurallar oluşturmalarını gerektireceğine inanıyorlar. Değişim hızı, eski yaklaşımlar için fazla yüksek. Sadece bugüne odaklanarak hazırlanan mevzuatlar, yürürlüğe girdiklerinde geçerliliklerini yitirmiş olacaklar. Belki de en iyi hareket tarzı iş birliği yapmaktır:
DeFi, stablecoin'ler olmadan var olamazdı.
Bunlar, dijital ekonominin gelişmesini sağlayan temel katmandır. Bu nedenle, bu token'lar kripto varlık piyasasının en ilgi çekici parçası olarak görülebilir. Onlar "fiyat artsın" mantığıyla değil, yaratıcıların finansal sistemin unsurlarını kod üzerinde uyarlayabilecekleri bir temel oluşturma amacıyla varlar. Ancak, internet parası dünyası geleneksel sistemle daha sık karşı karşıya geldikçe, bir uyumlaştırma süreci kaçınılmaz olacak. Fiziksel dünyadaki buzullar erirken, para politikası yapıcılarının düzenleyici etkisi dijital manzaraya buzulların hızıyla yaklaşıyor ve bu durum teknoloji uzmanlarının ve spekülatörlerin davranışlarını etkiliyor. Yeni iş modelleri yaratılıyor ve güç dengesi değişiyor. Eşitsizliğin devam etmesi muhtemel, ancak web3'teki dağılım farklı.
Buzullar denize döküldüğünde devasa dalgalar oluşur. Bazen özel kıyafetli seçkin bir sörfçü grubu, köpüklü dalgaları yakalayabilmek için buz uçurumunun kenarında bekleyerek hayatlarını riske atar. Başarılı olduklarında ortaya çıkan manzara ise tek kelimeyle muhteşemdir.
Bunu dijital ekonomiyle kıyaslayabiliriz. Yavaş yavaş ilerleyip aniden harekete geçen bir devin karşısında elementlerle mücadele etmek; cesaret, beceri ve belki de biraz delilik gerektirir. Kanun yapıcılarla istişare ederek üretmeye devam eden yenilikçiler de bu özelliklere sahip ve başarının dalgasını sürecek olanlar da onlar olacak. Umarız kurallar “boşa çıkmaz”.
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