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Ethena Labs founder Man Younger stated that stablecoins must concentrate on liquidity, not decentralization.
The principle query concerning the threat of stablecoins is expounded to solvency. One approach to scale back the chance of solvency is to arrange an insurance coverage fund. There will probably be multiple efficient collateral within the system, as a result of mainly there’s a pool of US {dollars} behind the stablecoin.
He stated the insurance coverage fund might act as a bidder of final resort to make sure stability if costs had been misaligned.
Younger additionally believes that the truth that Lido and its liquid staking forex stETH dominates the marketplace for ethereum staking companies will not be essentially a foul factor.
If you wish to ask which is extra vital, liquidity or decentralization in occasions of market volatility, then exchanges care extra about liquidity.
Lido’s staking platform and liquid staking token, Lido Staked Ether ( stETH ), has the perfect validator set and is battle-tested and has superb market traction.
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