Your Guide to the Next Big DeFi Stablecoins
Your Guide to the Next Big DeFi Stablecoins
Breaking down DAI, LUSD, FRAX, GHO, crvUSD, GYD, UXD and much more...
This research memo is for educational purposes only and not an inducement to invest in any asset. Subscribe to Blockcrunch VIP to receive in-depth project analysis, interactive token models and exclusive AMAs from our research team - all for the price of a coffee ☕ a day.
Introduction
With the recent depeg of the $40 BILLION stablecoin USDC, decentralized stablecoins are retaking the spotlight.
The focus is once again shifting towards stablecoins that are not reliant on a single entity and are backed by decentralized assets instead of traditional fiat currencies.
The winning protocol that successfully scales a trustless stablecoin will likely become one of the most valuable protocols in all of crypto based on the sheer scale of the proven, addressable market. As such, understanding the current decentralized stablecoin design space is paramount for any investor.
In this week’s Blockcrunch VIP memo, we provide an overview of the decentralized stablecoin landscape. We investigate key questions such as: (1) Can DAI, LUSD, and FRAX maintain their dominance? (2) What new features do Aave and Curve bring to the table? (3) Do novel stablecoin designs (non-CDP) have a chance against established giants? (4) What are the key factors that determine success in the decentralized stablecoin market? (5) What exactly are stablecoins competing for?
A stablecoin taxonomy that matters
The Incumbents
I. Maker DAO (DAI)
II. Liquity (LUSD)
III. Frax (FRAX)
The Challengers
IV. AAVE (GHO)
V. Curve (crvUSD)
The Pioneers
VI. Gyroscope (GYD)
VII. UXD Protocol (UXD)
Conclusion – what are stablecoins competing for?