Frax’s shift to a totally backed stablecoin alerts the top of DeFi’s algorithmic experiment

The Frax neighborhood lately accepted a proposal to make its FEI stablecoin absolutely backed by USD equivalents, fairly than sustaining {a partially} backed and semi algorithmic stablecoin. With Frax’s resolution, the times of experimentation with algorithmic stablecoins may lastly be behind us.

The decentralized stablecoin house has solely proved efficient with ETH, USDC and BTC backed stablecoins. The failure of algorithmic stablecoins (like UST) and depegging of overleveraged stablecoins (like MIM) has turn into one of many major causes for lack of confidence in decentralized stablecoins.

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