Charles Hoskinson explained how traditional financial players are entering the cryptocurrency sector and eating into the fundamental principles of cryptocurrency decentralization.
Charles Hoskinson is the founder of Cardano and co-founder of Ethereum. In 2014, Hoskinson left the Ethereum project and began working on Ethereum’s rival blockchain, Cardano. Instead of using any kind of hype or trending concepts, Hoskinson always tries to stay grounded in driving adoption of the Cardano blockchain.
Recently, the Cardano founder appeared in a new live video session via his personal YouTube channel. He spoke about the Defi cryptocurrency platform and the increasing centralization across cryptocurrency assets, especially stablecoins.
Hoskinson said stablecoins like USDC and USDT currently account for 70% of on-chain transaction volume, which is a big problem because these types of stablecoins are backed by centralized assets and centralized financial systems.
According to Hoskinson, these stablecoins are beneficial for cryptocurrency traders, but in reality, these stablecoins may have a negative impact on the Defi sector, which thinks everything is decentralized.
Furthermore, he mentioned how these stablecoins can be held on two chains simultaneously without devaluing one chain.
Hoskinson suggested that cryptocurrency companies adopt algorithmic stablecoins. While many supported the Cardano founder’s comments, some opposed the adoption of algorithmic stablecoins.
Colin LeMahieu, founder of Nano (XNO), said that it is nearly impossible to create the best stablecoin algorithm while simultaneously following the fundamentals of cryptocurrency.
Colin gave the example of the TerraUSD (UST) stablecoin, which was based on an algorithm but crashed badly in May 2022.
Despite the failure of TerraUSD, the leading algorithmic stablecoin, Cardano developers launched the Djed stablecoin, launching it on Cardano mainnet on January 31, 2023, but few people are talking about this stablecoin. Because Djed can now be used on multiple cryptocurrency networks such as USDC and USDT. Simply put, the Djed stablecoin is highly isolated from other cryptocurrency networks, so only users of the Cardano-based Defi platform can know and use it.
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