Cardano founder Charles Hoskinson expressed his confidence in the algorithmic stablecoin mechanism. He says such cryptocurrencies are “the gold standard of the digital age.”
Cardano founder highlights these cryptocurrencies instead of ADA
Hoskinson took to Twitter to share his views on algorithmically supported stablecoins, i.e. cryptocurrencies pegged to fiat rates through smart contract-based technical designs. Their explanation was also important due to the collapse of Terra using the same mechanism. The Cardano founder emphasizes that, unlike “centralized” stablecoins, the balance between the volume of collateral in algorithmic stablecoins and the stablecoin supply is not controlled by the stablecoin issuer. Algorithmic mechanisms instead depend on complex on-chain instruments.
The concept of algorithmic stablecoins is how we get nation states off of fiat currencies. It's the gold standard of the digital age. Use a deflationary cryptocurrency like bitcoin or ada to collateralize a stable coin that's use as a national currency.
— Charles Hoskinson (@IOHK_Charles) December 2, 2022
Algorithmic stablecoins are a concept that many believe can remove government control over the issuance and circulation of fiat currencies. Hoskinson says that adoption of the concept is inevitable, as it stands for a “gold standard” in the digital age.
Hoskinson also recommended some cryptocurrencies as reserves for algorithmic stablecoin projects. He suggested that Bitcoin (BTC) and Cardano (ADA) could be used because they are deflationary. According to him, BTC and ADA liquidity pools can protect stablecoins from depreciation. cryptocoin.comHoskinson also said that Cardano is an ideal network for Twitter integration.
Cardano (ADA) uses various stablecoin designs
In light of the lessons learned from the Terra crisis, the Cardano network has started to implement various stablecoin mechanisms in its own projects. Hoskinson therefore predicts that Bitcoin and Cardano-backed stablecoins could replace national fiat currencies. While some of his followers appreciated the idea, some expressed that it looks exactly the same as TerraUSD (UST).
Cardano is now gearing up to launch its over-collateralized stablecoin Djed on the mainnet in January 2023. Another Cardano team, EMURGO, has launched a central regulated stablecoin USDA in partnership with Anzens. With these new startups, Cardano is moving towards its leading position as the best staking network.
ADA is among the best staking networks
In his new posts, crypto researcher Sooraj compared Cardano to other PoS Blockchains. According to the staking rewards, Cardano has become the second largest staking network after Ethereum with a staking market cap of $8 billion. Ethereum, on the other hand, has a staking market value of $ 21 billion.
So here are those numbers
Where we compare the total number of
Individual wallets participate in the staking mechanism of both Cardano and Ethereum.#Cardano has 14x more participation than #Ethereumhttps://t.co/2hzAxiHzHwhttps://t.co/2zYgGC30OM pic.twitter.com/66naCbHZh7
— Sooraj (@Soorajksaju2) December 2, 2022
Sooraj lists five important metrics for a PoS-based Blockchain:
- Staking rate
- First coin distribution
- Nakamoto Coefficient (MAV),
- Total number of node operators
- Number of individual wallets participating in staking
How does Cardano differ from other projects in staking?
Those who stake on Cardano have the option to specifically run a validator and even delegate ADA to the validator of choice. Also, since Cardano has no lock period, ADA can be re-stake at any time. Staking rewards and ETH staking remain locked in Ethereum without the ability to withdraw. Withdrawals are scheduled for the upcoming Shanghai upgrade. Likewise, staking depends on central staking providers such as Lido and Coinbase.
Finally, the total number of individual wallets in Cardano is comparable to the total number of “unique depositors” in Ethereum. It turns out that Cardano has 14 times more engagement than Ethereum in this regard.
