Every crypto project that is trying to rebase the coin is attempting to make their own stablecoin. Luna tried it with UST and failed miserably. I am sure there are plenty of reasons for the failure. And just being elastic algorithm that adjusts as per demand is not one of those failure. I am sure USDT and USDC tried their best to bury the UST too.
Now do you remember there is one project on ERC20 named - Ampleforth? Yes they are still out there. They are one of the sponsors of Publish0x too. And they have two tokens so far namely - AMPL and FORTH. One being the elastic rebase coin and another is governance coin.
Now that they seem to be finding their own actions reasonable for the ecosystem, they have plans to launch their own stablecoin. And they have named it SPOT. Does SPOT has the potential to become the market mover in the chaotic stablecoin world? I don't think so. There are many reasons for that.
Why SPOT stablecoin is not going to be getting it easy?
I feel there are plenty of reasons why the stablecoins market is not going to work easily for anyone entering into the market right now. I have many reasons I feel may make it harder for a coin to become one of the top 5 stablecoins.
- Forex world does not want more decentralized stabelcoins. They want coins which can be controlled not by algos but by nations and banks.
- Binance, Houbi and other exchanges with their own stablecoins are in bed with the banks and other regulators, so they can survive.
- Algorithmic stablecoins are based on ideal scenarios which is not how real world works as it is full of manipulation.
- Pegging to any specific currency would be politically taken in wrong context. Some nations want to opt out of USD peg.
- If the developers are not in touch with regulators, it may attract the potential scrutiny and possible that coin may end up as a rug pull.
- If there is any company behind the coin, then it becomes centralized.
- Beating the binance, houbi, bittrex etc type of exchange on stablecoin game is now going to be lot harder as the market becomes dependent in the investment of those coins.
- Stablecoins can't exit from the clutches of the regulators and the banks where stablecoins will take bigger hit from the market if they don't obey.
I am not being too critical of stablecoins here but just trying to put some of my thoughts out there. As the stablecoins are going through a lot this year. And unless that coin has proven use case and shown some good indication of the growth or adoption in the exchange or from the market, it just gets harder.
It's too early to say if the SPOT will struggle or not. But considering it's just a token on Ethereum. I don't feel much positive about it. As the makers of it didn't bothered to have their own chain instead relied on layer 2 solution of the ethereum.
Let's see where this stablecoin takes us or is it going to die like UST?