kaal:claim:3782216-034

Stablecoin collateralization and a robust decentralized economy form a chicken and egg problem: a stablecoin cannot reduce its backing until a robust decentralized economy exists, and that economy cannot be built without an efficient stablecoin.

We need a robust decen- tralized economy before a stablecoin can reduce its collateralization. We need an ef- ficient and useful stablecoin before we can build a robust decentralized economy. This is another of the many chicken-and-egg problems that hamper the adoption of new systems.

Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021), Hot money
https://ssrn.com/abstract=3782216 · source PDF

Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216

• while most cryptocurrency use is speculative hot money

failuresupport: arguedfailure: stablecoin chicken and eggfamily: cold-start-and-bootstrappingtokenomics

• restates kaal:claim:3782205-030 The stablecoin cannot be efficient until a robust decentralized economy already exists, producing a chicken an...

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