If you had to pick a single “stablecoin” pairing for SPOT, which one would you choose? Say this would be on Uniswap V3.
It seems sentiment in the space has been changing rapidly wrt dollar coins with all the news lately, so I’m really interested to hear what the rest of the community thinks.
Before the Tornado Cash debacle, I would have suggested using USDC. But now after having seen them freezing TC users assets, I oppose now using USDC.
The next in-line would be USDT. They haven’t frozen any assets associated with Tornado Cash, but I’ve read some statements from them that they would do freezes if there were asked by authoritiesto do so.
For these reasons, I suggest DAI for now. The thing I don’t like about DAI though is that USDT and USDC might attract more liquidity and trading volume than DAI. If SPOT would be listed on Exchanges, they would probably use USDT or USDC as the trading pair.
It would be nice to pair with a decentralized stable that has minimal code, or low governance risk, or low liquidation risk, or low custodian risk. But I don’t know of any.
I think the next best pairing is with one of the big fiat-DeFi stables (USDT/USDC/BUSD), so that holders can trade for SPOT through deep liquidity and minimal slippage. Big stables also have more users than small stables, so this might bring more users to SPOT and into the Ampleforth ecosystem.
I think you should choose ETH. Why? Because you are on the Ethereum network. It would be logical, simple and resilient. If currencies from all over the world would break, ETH would still be there… and so SPOT would still be there.
Like @Togenkyo said, I would have supported USDC prior to the TornadoCash sanctions. Now I’d recommend USDT because it has a few nice traits:
- Greatest liquidity and use in DeFi
- Has recently been more open about their backing
- Appears more resistant to censorship than USDC at the moment
- Already used for Mooncake/ButtonZero’s AMPL tranching
DAI would be the feel-good choice, but it’s too heavily reliant on USDC backing and its liquidity and usage are lower.
I agree with all the points you mention in favor of ETH. It’s absolutely the most resilient. The downside is that we’d be unable to leverage concentrated liquidity of Uniswap v3 to the same degree. In the early days of SPOT when the supply is lower, this could have a big impact.
There’s still likely a place in the ecosystem for an ETH pairing, but a stablecoin option brings a lot of benefits–especially in the short term.
I understand that you want to have a maximum volume for its launch. For this reason, it would be good to choose DAI.
Anyway, I guess we will have the opportunity to exchange our future SPOTs for ETHs?
I will choose DAI, second biggest TVL on Uni V3, relatively better decentralization, and, it will benefit for future possible co-op / fork to MKR.
Out of these, DAI is the most decentralized - at least, it is trying to be. Decentralization and censorship resistance are important for the DAO’s mission of building a resilient financial ecosystem, so DAI would be consistent with that. If we’re trying to contain Risk by capping deposits, LUSD (collateralized entirely by ETH), alUSD, MIM, or sUSD can be considered.
@Brandon I’m a bit disappointed by the choice of USDC to have been used for the stablecoin pairing for SPOT. Out of the options that were discussed here, I think USDC was the worst choice, because of the censoring that happened. (I myself have been a heavy tornado cash user and for that reason, I won’t be touching USDC ever again)
USDT or DAI would have been a better choice in my opinion.
Hey @Togenkyo, I appreciate that. I admit it was a tough call. Of all the options, there didn’t seem to be one that provided everything we would have wanted.
Ultimately, we decided that the liquidity of USDC was still so far ahead on the Uniswap platform that the concrete benefits made it a safe choice. You can compare those here:
If SPOT isn’t successful first and foremost, than none of the other considerations matter, so optimizing for market health (in the beginning!) makes a lot of sense. Longer term, this doesn’t need to be the only, or even main pool. And because of the permissionlessness of DeFi, other LPs are free to start and seed any other pool they value.