Avalanche Founder: I’m Bullish on UST Once the Dust Settles Down

Avalanche Founder: I’m Bullish on UST Once the Dust Settles Down

The Founder of Avalanche and CEO of Ava Labs is bullish on TerraUSD (UST) ‘once the dust settles down’
He explained that only active teams could defend algorithmic stablecoins against destabilizing bank runs
Decentralized stablecoins are necessary as fiat-backed stablecoins are subject to legal seizures
The markets will eliminate weak algorithmic stablecoins
US-based teams do not have the right regulatory environment to run algorithmic stablecoins

The Founder of Avalanche (AVAX) and current CEO of Ava Labs, Emin Gün Sirer, has expressed optimism about UST’s future, further stating that he was bullish about the stablecoin ‘once the dust settles down.’ He said:
I’m not the least bit surprised by UST’s resilience. Remember that every single stablecoin has, at times, depegged, including fully-collateralized fiat-backed stablecoins. All of them that have a real team behind them have bounced back.
Overall, the UST depegging played out exactly as we saw in past historical cases. I’m even more bearish on all copycats, and bullish on UST once the dust settles down.
Mr. Gün Sirer shared his insights on TerraUSD (UST) through an informative Twitter thread that started by pointing out that ‘even fully-collateralized fiat stablecoins have depegged’ and ‘some of the weak algo stablecoins have recovered.’

Even fully-collateralized fiat stablecoins have depegged. Even some of the weak algo stablecoins have recovered.
Some thoughts. 🧵👇
— Emin Gün Sirer🔺 (@el33th4xor) May 10, 2022

It Would Have Been ‘Doom’ Had This Happened in Traditional Finance
He also pointed out that the crypto and DeFi industry had just weathered a substantial bank run and that the space was ‘incredibly resilient.’
Additionally, he stated that ‘had this happened in TradFi, there would have been talk of doom and bailouts galore. One thing we know though, the bankers’ bonuses would still be paid.’
Decentralized Stablecoins Are Necessary
Furthermore, Mr. Gün Sirer added that decentralized stablecoins were necessary as fiat-backed stablecoins were subject to legal seizure and capture. According to his perspective, a decentralized economy needs a decentralized stablecoin that cannot be frozen or confiscated by authorities.
However, he cautioned that US-based teams could not succeed in developing an algorithmic stablecoin due to regulatory hurdles within the country. According to his analysis, only Korean, Singaporean, or Swiss teams have the right regulatory environment to develop algorithmic stablecoins.
There is Only Room for A Few Algo Stablecoins
Concerning the future of algorithmic stablecoins, he pointed out that there was not enough room for several algorithmic stabelcoins. The market only had room for one. He said:
There isn’t room in the market for a dozen, or half a dozen, or even just two algorithmic stablecoins. This is a market where the biggest one wins and all others lose.
If there’ll be a decentralized stablecoin that succeeds, it’ll be the one with the biggest value and the most battle-tested team.
[Feature image courtesy of iStockPhoto.com]
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