A Collection of Stablecoin Research Reports

1. Talking about global stablecoin regulation

Introduction: The core content of the article is that major countries and regions around the world have inconsistent regulatory stances on encrypted assets and stablecoins, and their regulatory frameworks and legislation are also at different stages. The article details the latest developments in the regulation of cryptoassets in Hong Kong, Mainland China, the United States, Singapore, and the European Union. The Hong Kong Monetary Authority has released a discussion paper on expanding the regulatory framework to stablecoins, raising risks and specific discussion issues related to stablecoins, and plans to formulate a new regulatory regime by July next year. Other countries and regions are also exploring regulatory frameworks and legislation for crypto assets. The purpose of this article is to provide readers with general reference and guidance on regulation in these countries and regions.

**Star rating:**4

2. Discuss the evolution of the stable currency market: why USDT always ranks first?

Introduction: Despite being the least trusted stablecoin, Tether (USDT) has become the dominant stablecoin. In the stablecoin market, USDC and DAI have suffered decoupling amid the banking crisis, while BUSD has set an expiration date due to regulation. Trading volumes on CEX and DEX exchanges show different stablecoin preferences. Investors seem to value USDT’s stability, liquidity, and versatility more than its opaque reporting. The stable currency market has undergone tremendous changes in 2023, and USDT has become the most trusted stable currency in the industry. The transaction volume share of stablecoins has also gradually increased, becoming the most important part of the market. The article also explores the evolution of the stablecoin market landscape and why USDT always occupies the number one position.

**Star rating:**4

3. The United States will offer a stablecoin bill, which stablecoins are at risk?

Introduction: The core content of this article is the report on the strengthening of the supervision of stablecoins in the United States. On September 21, the U.S. House of Representatives introduced the Stablecoin Act, which prohibits the issuance of algorithmic stablecoins similar to TerraUSD (UST). As required by the draft bill, the definition of illegal stablecoins includes those that rely on digital assets from the same creator to maintain their fixed prices. The article further discusses whether different types of stablecoins meet the description of the ban, and lists some stablecoins that may face supervision, including over-collateralized stablecoins (such as sUSD, aUSD), stablecoins with mechanisms similar to Terra (such as USDN ), some algorithmic stablecoins (such as Frax), etc. In addition, the bill also provides a channel for the legal issuance of stablecoins backed by fiat currencies, and stipulates the approval process and related penalties for non-bank issuers.

**Star rating:**4

4. In-depth observation of decentralized stablecoins: Who can win the championship?

Introduction: This article mainly talks about the centralization risks of stablecoins and the importance of decentralized stablecoins. Stablecoins can be divided into centralized stablecoins and decentralized stablecoins, but as long as they are not completely decentralized, stablecoins must face the risk of default brought about by centralization. In the era when centralized regulation is approaching, decentralization has become an important attribute of stablecoins. The vast majority of stablecoins are only the function of commercial bills, and the stablecoin mechanism should consider creating its own demand scenarios and unique economic activities. Centralized stablecoins such as USDT and USDC occupy the vast majority of the stablecoin market, while opportunities for the development of decentralized stablecoins still exist. The centralization risk of stablecoins cannot be ignored, while decentralized stablecoins have better anti-censorship risk attributes. The decentralization of stablecoins means that stable credit can be created without centralized power, and the issuers of centralized stablecoins will be threatened by centralization risks. Therefore, decentralized stablecoins have potential development opportunities in the stablecoin track.

star rating: 4.5

5.RAI: The “ideal type” of decentralized stablecoin in V God’s eyes

**Introduction: **RAI is one of the most decentralized stablecoins on the Ethereum network, with the ultimate trustless features of non-legal currency anchoring, complete decentralization, and minimal governance. It is considered “the purely ideal type of collateralized automated stablecoin backed only by ETH”. The decentralized stablecoin track where RAI is located has a broader development prospect, because it conforms to the mainstream narrative of the anti-censorship and trustless encryption world, and the current degree of development is relatively low. RAI does not anchor any legal currency, so it is exempt from US regulation and the influence of the Federal Reserve’s monetary policy.

The main risks include the low acceptance of fiat currency-anchored stablecoins on the user side, market promotion resistance, minimal governance restrictions, the team’s relatively general progress in use case expansion and marketing, and the code risk of the RAI mechanism.

The core business of Reflexer Finance is the issuance and operation of the stable currency RAI. Users can generate RAI by over-mortgaging ETH and pay loan interest to continue using RAI. System governance is carried out by the holders of the governance token FLX, and it is hoped that there will be no governance in the future. RAI does not anchor any legal currency or physical objects, but automatically adjusts the target price through market supply and demand.

The supply control mechanism of the Reflexer system affects users’ lending and repayment behaviors by adjusting the redemption price of RAI to achieve active control of RAI supply. The system will adjust the redemption price according to the market price to guide the market price close to the redemption price, so as to achieve a balance between supply and demand.

**Star rating:**4.5

6. The business status, opportunities and challenges of Liquity, the leading decentralized stablecoin

Introduction: This article is about Liquity’s business development and how it competes with other stablecoin protocols. The article lists the important milestones and partners of Liquity from its establishment to the present, and introduces the team members and the analysis of the stablecoin track. The article mentioned the importance and development space of stablecoins in the DeFi field, and mentioned two important events that have recently affected the stablecoin market structure. Overall, this text aims to give readers more perspectives on Liquity and stablecoins.

**Star rating:**4.5

7. Taking Frax as an example, discuss the challenges and risks faced by decentralized stablecoins

Introduction: This article takes Frax as an example to conduct research, answering the question of why Frax uses USDC as a reserve, and whether decentralized stablecoins can be transformed into using fully decentralized collateral while maintaining minimal risk . The article pointed out that Frax, as a decentralized stablecoin protocol, still relies on USDC as collateral, and the decoupling of USDC shows that a 100% mortgage rate is not enough for Frax. The Frax team is grappling with which assets to choose as collateral. Currently, Frax chooses USDC as collateral because it is the “least risky economically responsible” instrument in the U.S. dollar. However, excessive reliance on a centralized third party will bring a certain degree of external risk. The ultimate goal of Frax is to open a US dollar deposit on the main account of the Federal Reserve to provide the best risk protection. However, since Frax is a fully on-chain entity, the process of obtaining the Fed master account will be more difficult. Therefore, Frax needs to explore the possibility of alternative collateral, and one possible direction is to directly purchase US Treasury bonds. Finally, the article pointed out that the SVB crash was a practical test of the entire crypto ecosystem, and Frax proved its strength by showing its own resilience and improving its collateral strategy.

**Star rating:**4.5

8. Decentralized stable currency risk assessment: USDN reserve is insufficient, FEI, FRAX and other risks are low

Introduction: The article mainly discusses the impact of UST thunderstorms on decentralized stablecoins, and introduces and analyzes the risks of commonly used decentralized stablecoins. Among them, DAI is considered to be the stable currency with the lowest risk, which has been tested by the market and has a clear liquidation mechanism. The PCV of Fei Protocol is mainly based on ETH as collateral assets, and the risk is low. The data of FRAX is healthy, with sufficient liquidity and low risk.

In addition, the text also gives a detailed introduction to the minting methods of MakerDAO’s DAI, MIM, Frax and other stablecoins, and points out the risks and moats they face. For Frax, although there is a possibility of spiral death during a run, after more than a year of stable operation, its risk is relatively small compared to other forked projects and UST.

**Star rating:**4.5

9. Analysis of 25 stablecoin projects: After the collapse of UST, where is the way out for decentralized stablecoins?

Introduction: The stablecoin market currently accounts for 14.2% of the total crypto market, 90% of which is dominated by centralized projects such as USDT, USDC, and BUSD. In contrast, smart contract-based DeFi stablecoins account for only 8.3% of the total stablecoin market capitalization. However, with DeFi platforms such as Aave and Curve launching their own stablecoins, there has been interest in the prospect of decentralized stablecoins. The article analyzes the operating mechanism, main use cases, risk factors, etc. of 25 decentralized stablecoin protocols, and points out that stability, decentralization, and capital efficiency are the key characteristics of these projects. However, every project requires compromises among these three characteristics. In addition, several algorithmic stablecoins are introduced and their characteristics are explained.

**Star rating:**4.5

10. Is the integration of DeFi and CeFi inevitable? An article to understand the evolution of the decentralized stable currency DAI

Introduction: The content of the article is about the introduction of MakerDAO and the stable currency DAI and the reasons for the recent actions. MakerDAO is a DeFi lending protocol that provides two products: over-collateralized loans and the stable currency DAI. Borrowers obtain DAI-denominated loans by over-collateralizing crypto assets. MakerDAO grows its assets by investing in U.S. Treasury bonds and stablecoin assets through the Peg Stability Module (PSM). PSM allows users to swap fiat currency stablecoins with DAI in a cost-free manner, keeping the value of DAI and the US dollar stable. However, most of the DAI comes from PSM, and the proportion of encrypted assets borrowed is low, which makes DAI more like a wrapped USDC, and there is a counterparty credit risk.

**Star rating:**4