- June 18, 2021
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
Following from his five hours guest spot in Lex Fridman’s podcast, Charles Hoskinson is back at his desk. And true to his academic nature, he promises that his company IOHK will release a paper on algorithmic stablecoins “in the next few weeks.” This is not the first time that Hoskinson has talked about stablecoins, and maybe he’s hinting at a new development for the Cardano ecosystem.
This is the tweet in question:
We have a really amazing algorithmic stablecoin paper coming out in the next few weeks. Unfinished business since the Bitshares days.
— Charles Hoskinson (@IOHK_Charles) June 18, 2021
Hoskinson was the co-founder of Bitshares. The reason he left is not a matter of public record. However, in 2014, Hoskinson wrote in the bitcointalk forums, “I was the CEO of Invictus Innovations until October. I was pushed out of the company and totally divested in early October.” And in a posterior post, “It makes me sad that I can’t do it with the company I helped fund, named and dearly loved, but that’s business. I always remember that this isn’t about people- it’s about the goal of changing the way the financial world works.”
Related Reading | Ethereum Co-Founder Has His Doubts Over Cardano’s “Scientific Method”
That sounds like a story. But, back to stablecoins.
What’s An Algorithmic Stablecoin?
The most widely used stablecoins are USDT and USDC, in which the companies behind them are supposed to hold a fiat equivalent to every coin they mint. Another kind is collateralized by other cryptocurrencies, the service that mints DAI holds your digital asset and gives you a similar amount of their worth in their stablecoin. There’s a third kind, as Coinmarketcap explains:
Algorithmic stablecoins use algorithms to balance the circulating supply of the asset. In simple terms, the algorithm issues more coins when price increases, and buys them off the market when the price falls.
For example, assume a stablecoin is priced at $1. When the price drops to $0.80, an algorithm recognizes the imbalance between supply and demand, and automatically sets a market buy order to push the price back. In case the price goes above $1, the algorithm sells assets to maintain the price on the predefined level that keeps the peg.
And that’s what Hoskinson seems to be working on.
ADA price chart on Coinbase | Source: ADA/USD on TradingView.com
Other Times Hoskinson Talked About Stablecoins In The Past
The most obvious example is this February tweet when he says he’s been “thinking about them for seven years.” Notice that he’s referring to a crypto-collateralized type of coin, and not an algorithmic one.
If we do this, then it will blow everyone out of the water. I started in this space with stablecoins and we've been thinking about them for seven years https://t.co/t4FGxW7cLk
— Charles Hoskinson (@IOHK_Charles) February 11, 2020
His company is also involved in the AgeUSD stablecoin project, which “is a result of a joint partnership between the Ergo Foundation, EMURGO, and IOHK.” Cryptoslate describes it as:
EMURGO, a multinational blockchain company tasked with developing solutions for the Cardano blockchain, has announced the launch of a new stablecoin called AgeUSD. The stablecoin, however, won’t be launched on Cardano, but on Ergo, a decentralized blockchain platform.
That’s because Cardano hasn’t released its mainnet yet. They apparently recently deployed a smart contract in a testnet, though. NewsBTC reported:
At the beginning of June, this company launched the first testnet for the platform’s Alonzo era, AlonzoBlue. This phase in Cardano’s development has the objective of stress test their smart contract platform, Plutus. IOG’s media department announced:
The first simple Plutus smart contract has this week been successfully run on the AlonzoBlue Cardano testnet.
Hard Words For JPM Coin
Besides affirming his theoretical stablecoin “will blow everyone out of the water,” he didn’t spare bullets about the JPM Coin. In the Hybrid Summit in Hong Kong, Coinwire quotes him:
“I saw the JP Morgan Coin, and listen – you guys just don’t get this space. You don’t know how any of these things work. It’s an abomination of a concept. First: They are the Federal Reserve.”
“They run the whole damn show. Them and five or six other entities. And there’s absolutely no need or utility behind what they’ve created. It’s just a proof of concept for the sake of being a proof of concept to say that they’re in the space, and they can justify some sort of bizarre executive fantasy.”
Yikes!
Related Reading | Cardano Reaches All-Time High, Ahead of Ethereum in Transaction Volume
Hoskinson lies through his teeth every time he talks about Bitcoin, that much is well-known. However, he has no problem expressing what he thinks about other projects in the space. The man is a great marketer. And he’s got the killer instinct.
Let’s just hope he can deliver on everything he promises for Cardano and ADA.
Photo by Dan Dimmock on Unsplash - Charts by TradingView
