Nick van Eck, CEO of the stablecoin issuer Agora, recently commented on “yield-bearing stablecoins,” stating they are “not money or stablecoins.” He clarified that stablecoin issuers offering passive income deviate from the core purpose of stablecoins.
Van Eck discussed the evolution from Stablecoin 1.0 to Stablecoin 2.0, noting that Bitfinex and Tether were pioneers in introducing centralized digital dollars. While USDT remains a prime example of Stablecoin 1.0, many other stablecoins have emerged following Tether's success.
Van Eck identified two major issues with yield-bearing stablecoins that disqualify them as true stablecoins or money:
lower utility and acceptance, and limited development margin. He emphasized that liquidity problems are prevalent in the yield-bearing stablecoin market.
Many countries, including the United States, view yield-bearing stablecoins as securities, which restricts their customer base. Van Eck highlighted that these stablecoins are not “freely tradable,” thereby limiting “liquidity providers, vendors, and a higher utility ceiling.”
He described yield-bearing stablecoins as complementary to AUSD, USDC, and USDT. Introducing Agora’s AUSD as the “next iteration of stablecoins,” or Stablecoin 3.0, van Eck explained:
“We designed AUSD’s model to be the best stablecoin for your business. We compensate businesses for services they provide, such as listing our token, providing liquidity, marketing, and accepting AUSD as payment or collateral on their platform.”
Additionally, van Eck announced the launch of AUSD on Ethereum Mainnet in June, asserting that AUSD's use could bolster the entire crypto industry.
May 2024, Cryptoniteuae