A scaled FIAT-backed USD stablecoin will not only enable massive growth for algocoins, but enable them to keep a stronger peg with lower stability fees as well. Maintaining the 1-1 peg is the biggest challenge with algocoins. FIAT-backed USD stablecoins are convertible, so market participants are confident in their peg. The peg-maintaining issue for algocoins is largely solved by providing a means to convert algocoins to FIAT-backed USD stablecoins. Market participants need to see that they can convert algocoins to FIAT-backed coins. Literally ‘knowing’ they can convert if they want to, renders higher confidence in the 1-1 algocoin peg.
This can be observed at info.uniswap.org. USDC/ETH is the largest most active pool. The largest pools for DAI and FRAX (algocoins) are not their pairings with ETH, but rather their pairings with USDC (DAI/USDC, FRAX/USDC).
USDtz is a friend to algocoins and a scaled USDtz on Liquidity Baking will pave a golden road for kUSD and uUSD in the future.
