Written by 10:01 pm Bitcoin

Incentives Of Stablecoins On Bitcoin – Bitcoin Magazine

Since the announcement of the Taro protocol by Lightning Labs, the topic of stablecoins issued directly on the Bitcoin blockchain has become the center of conversation again. In reality this is not something new. Tether, the first stablecoin, was originally issued on the Bitcoin blockchain using the Mastercoin (now called Omni) protocol that enabled the issuing of other tokens on the Bitcoin blockchain. Stablecoins literally began on the Bitcoin network, but due to the constraints of the block size limit and the fee event in 2017, they have migrated to other blockchains. It began with Ethereum, and then proliferation to more centralized and cheaper fee blockchains as time went on. Ultimately, centrally issued stablecoins are centralized, and no matter how decentralized the blockchain is that you issue them on, their value is ultimately derived from the ability to redeem them from a single centralized entity who can refuse to do so. I.e., the issuing of them on a decentralized blockchain is complete theater in the sense that it does nothing to decentralize the stablecoins themselves; the only benefit in doing so is ease of interoperability with native things on that blockchain.

Source link

Close