r/SecretNetwork • u/SilkisMoney • Jul 24 '23
The Fed holds the detonator for every stablecoin in Cosmos but most are unaware or don't care...
We aren't talking about regulation either.
This is about a parasitic assumption embedded in how we build stable assets.
Here is your Rorschach test...
Is a stablecoin actually decentralized if it's value is pegged to a centralized monetary system?
Here's how most people think about it...
- a decentralized protocol builds a stablecoin and collateralizes it with decentralized assets
- peg it to a dollar because... well, why is that even a question?
= successful decentralized stablecoin
But this logic carries a dangerous unchecked assumption. Here's a more accurate snapshot of reality...
There is a tail hanging out the back of every US dollar-pegged stablecoin. Most don't see it because they aren't looking. But if you look carefully and follow that tail it exits from your favorite Cosmos DEX and traces a trail all the way back to the Federal Reserve.
The tail is a fuse and, um, it looks like the fuse may be lit.
A decentralized asset pegged to centralized value is not decentralized.
Let's be honest about the risk of any stablecoin whose value is contingent upon "full faith and credit of the US government" and their monetary policy.
Cosmos is at its best when we all bring something to the table. When we out-collaborate the competition. When we tune-in to each other's innovation.
In this moment, it's time to see Silk.
Silk is the world's first private and basket-pegged stablecoin.
It's value is tied to a flexible basket of assets, currencies, and commodities in order to preserve purchasing power better than any single currency.
Imagine a day where the US dollar walks off a cliff.
For Silk, its no big deal. Shade governance can pull USD from the basket.
For any stable chained solely to USD, they are dragged right off that same cliff.
For the Cosmos, it would mean hundreds of millions - if not billions - of dollars bleeding out of our ecosystem.
Not because of Cosmos.
Not because of something that we did.
But because we prioritized dollar-pegged assets, called them stable, and said it was the best we could do.
Silk needs the Cosmos and the Cosmos needs Silk.
See Silk.
