Why Stablecoin Growth Over 5 Years Doubled in 4 Months – Ep.134


Nate Maddrey, senior research analyst at Coin Metrics, discusses a report on the rise of stablecoins over the last few months that Coin Metrics published in conjunction with Bitstamp. He covers: 

  • why a stablecoin supply that grew over five years has doubled in the last four months 
  • why demand has grown, specifically for Tether, especially after Black Thursday
  • why that demand caused Tether’s price to rise above $1 post-Black Thursday
  • why Tether is the most dominant stablecoin
  • how traders were making money off that arbitrage opportunity and why the arbitrage stayed in place so long
  • where Tether is popular
  • why Tether’s price goes up when the free float supply is high and why it goes down when the free float supply is low
  • why the stablecoins have varied in their ability to stay stable and how individual stablecoins have reacted
  • which types of users are holding stablecoins and various types of users are doing with it
  • why it is that stablecoins appear to have different median exchange values
  • and why stablecoins have higher velocity than bitcoin and ether

Thank you to our sponsors! 

Crypto.com: https://www.crypto.com

Nexo: https://nexo.io

Tezos: https://tquorum.com/


Episode links: 

Nate Maddrey: https://twitter.com/natemaddrey

Coin Metrics: https://coinmetrics.io

The Rise of Stablecoins report: https://coinmetrics.io/the-rise-of-stablecoins/


Links from news recap:


Christopher Giancarlo: Why the US Needs to Have a Digital Dollar – Ep.177


At an event at the NYU Stern School of Business, Christopher Giancarlo, former CFTC Chairman and co-founder of the Digital Dollar Foundation, discusses his proposal for a US central bank digital currency (CBDC), and how that fits into the broader geopolitical environment. We cover:

  • Why he has focused on pushing for a US digital dollar after leaving the CFTC
  • How a US CBDC would be different from other stablecoins
  • How the proposal is designed to build off of the traditional banking infrastructure
  • What pilot programs would look like
  • How a digital dollar would foster economic inclusion even though using the digital dollar requires owning a smartphone
  • How it would handle privacy
  • How the network would be secured
  • Whether the US is falling behind China in terms of central bank digital currencies and blockchain exploration
  • Whether Libra will be a proxy for the digital dollar
  • How COVID-19 has affected the discourse around a digital dollar
  • Whether the election will affect the future of the digital dollar

Thank you to our sponsors! 

Crypto.com: https://crypto.com

Kelman Law: https://crypto.law  

Stellar: https://www.stellar.org

Episode links: 

Chris Giancarlo: https://twitter.com/giancarlo

Digital Dollar Project : https://www.digitaldollarproject.org

Previous Unchained interview with Chris: https://unchainedpodcast.com/christopher-giancarlo-on-the-craziness-of-becoming-crypto-dad/ 

Chris and Daniel Gorfine’s WSJ op-ed advocating for a digital dollar: https://www.wsj.com/articles/we-sent-a-man-to-the-moon-we-can-send-the-dollar-to-cyberspace-11571179923

Digital dollars in stimulus bills — March: https://www.coindesk.com/house-stimulus-bills-envision-digital-dollar-to-ease-coronavirus-recession 

April: https://www.coindesk.com/digital-dollar-reintroduced-by-us-lawmakers-in-latest-stimulus-bill

Pew Research on smartphone adoption: https://www.pewresearch.org/internet/fact-sheet/mobile/

FDIC survey on the unbanked and underbanked: https://www.fdic.gov/householdsurvey/2017/2017execsumm.pdf

Banks keeping some of customers’ stimulus money: https://www.nytimes.com/2020/04/16/business/stimulus-paychecks-garnish-banks.html

Why a digital dollar is politically more feasible at this moment than before: https://www.coindesk.com/the-overton-window-opens-for-a-digital-dollar

Ohio Senator Sherrod Brown also proposes digital dollar: https://www.coindesk.com/us-senate-floats-digital-dollar-bill-after-house-scrubs-term-from-coronavirus-relief-plan 

Philadelphia Fed paper: https://www.philadelphiafed.org/-/media/research-and-data/publications/working-papers/2020/wp20-19.pdf

Receptivity in Congress to the idea of a digital dollar: https://www.coindesk.com/how-a-flurry-of-digital-dollar-proposals-made-it-to-congress

Libra white paper: https://libra.org/en-US/white-paper/#cover-letter

Congressional hearing on using FedAccounts and for stimulus: https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=406612

Teetering on the Edge: How Black Thursday Exposed the Flaws in the Crypto Markets – Ep.164 [podcast]


Kyle Samani, managing partner at Multicoin Capital, dissects Black Thursday, March 12, the day the crypto markets plunged twice amid the wider sell-off in the markets due to the coronavirus. He offers several theories for the first price drop that day, how that set off a series of liquidations on various exchanges, and then why liquidations stopped for about 12 hours before the next wave, which triggered the next price slump. He also describes why, at that point, the crypto market structure broke, as arbitrageurs attempted to move collateral from one exchange to another but could not because both the Bitcoin and Ethereum blockchains became congested, setting off a downward spiral particularly in Bitcoin, as miners began turning off equipment due to the falling BTC price. This led, ultimately, to there being $200 million worth of positions to liquidate on BitMEX, but only $20 million worth of bids on the entire BitMEX order book. Then we cover what happened next that ultimately saved the price of BTC dropping to $0 on BitMEXT.

Next, we discuss the second fall in prices that day, and how that affected MakerDAO, with congestion on the Ethereum blockchain preventing keepers from being able to liquidate undercollateralized vaults. A clever keeper sent a bid to liquidate a vault with a higher gas price, but realizing that there was no competition, bid $0, walking away with $4.5 million, and a total of $8 million being won this way. We covered how the price of ETH fell to $88 but because oracles weren’t properly updating, the last price of ETH on MakerDAO was at $101 — a dollar higher than the $100 where a bunch of liquidations would have occurred, which would have likely put more downward pressure on ETH, resulting in another downward spiral. 

Kyle also evaluates some of the technical options for preventing these issues in future times of volatility, why many of them aren’t promising but what is. 

Thank you to our sponsors! 

CipherTrace: https://ciphertrace.com

Crypto.com: https://crypto.com/

Kraken: https://www.kraken.com

Episode links: 


Links from news recap:

Kyle Samani: https://twitter.com/KyleSamani

Multicoin Capital: https://multicoin.capital/

Multicoin blog part 1: https://multicoin.capital/2020/03/17/march-12-the-day-crypto-market-structure-broke/

Part 2: https://multicoin.capital/2020/03/20/march-12-the-day-crypto-market-structure-broke-part-2/

Theory that BitMEX’s maintenance was to prevent a collapse in Bitcoin: https://twitter.com/SBF_Alameda/status/1238306306043162625


How traders took advantage of the roiling markets: https://www.theblockcrypto.com/post/59172/surfing-the-spread-crypto-market-turmoil-arbitrage

More on the liquidations in MakerDAO: https://medium.com/@whiterabbit_hq/black-thursday-for-makerdao-8-32-million-was-liquidated-for-0-dai-36b83cac56b6


MakerDAO weighs emergency shutdown: https://www.coindesk.com/defi-leader-makerdao-weighs-emergency-shutdown-following-eth-price-drop

MakerDAO adds USDC as collateral: https://www.coindesk.com/makerdao-adds-usdc-as-defi-collateral-following-black-thursday-chaos

Kain Warwick on USDC as Dai collateral: https://twitter.com/kaiynne/status/1239795250882740225?s=20

Eva Beylin on USDC as Dai collateral: https://twitter.com/evabeylin/status/1240039492985085952?s=20

Huobi’s derivatives platform introduces circuit breaker: 


Debate over circuit breakers in crypto: