# kaal:claim:3782216-034

**Claim.** 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.

**Type.** failure  **Support.** argued

**Holds when.**

- while most cryptocurrency use is speculative hot money

**Source quote.**

> 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.

**From.** Craig Calcaterra, Wulf A. Kaal, *Decentralized Finance (DeFi)* (2021), Hot money

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

**Verify.** sha256 of source PDF `f1739743aa06bbc1641cd65da790d531b69d8628ea3f5cc3fcad1bf5a1242373` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20Decentralized%20Finance%20%28DeFi%29.pdf

**Failure mode.** stablecoin chicken and egg  (family: cold-start-and-bootstrapping)

**Topics.** tokenomics

**Keywords.** stablecoins, collateralization, bootstrapping, adoption

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3782205-030

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.