Hello Friends! Since Andre Cronje announced StableCredit last week there has been a lot of speculation on how it compares to Maker and Dai. I’ve pooled some resources that help explain what it is and would love to hear your thoughts!
Announcement - StableCredit combines tokenized debt stable coins, lending, AMMs, and single sided AMM exposure to create a completely decentralized lending protocol
Bankless Interview with Andre - My main take away from this is that the MORE popular an asset is in the system (eg ETH), the less efficient drawing credit will be (in proportion to the other assets in the pool).
Thanks to @marcandu for surfacing this great twitter thread that adds more depth and the drawbacks.
So my main takeaways from this “research” - (let me know if I’m off!)
- StableCredit system limits upside exposure to deposited assets.
- Seems well-equipped to enhance trading between assets and encourage a well-balanced asset pool
- I don’t believe StableCredit holders are protected during a black swan event
- Arbitrage traders will be key in maintaining a balanced system.
- Seems like it would work well in a neutral trading market, and less efficient in bull or bear markets
- Doesn’t seem built for real world assets.
- What happens when collateral drops and causes StableCredit to be unbacked?