This also helps mark the progression of stablecoins from being centralized to decentralized, and the DeFi industry as a whole The term “destablecoins” helps to achieve two purposes.įirstly, and more purposefully, the prefix “de” in “destablecoins” stands for decentralized, and that is to clearly distinguish products such as HAY from other legacy stablecoin products such as BUSD and USDC, which is controlled by a centralized custodian. Similarly with destablecoins, it does not aim to achieve absolute price parity with US $1 as a primary objective nor rely on fiat assets as the backed collateral. All currencies are different and have varying reference rates, so price fluctuations should be considered a norm defined by the market instead of aiming for a sense of absolute price stability at all cost. Secondly, destablecoins aims to achieve stability broadly without an absolute peg to the fiat currencies.
Additionally, destablecoins will also leverage on liquid staked assets. Crypto-backed stablecoins such as DAI leverage on centralized crypto assets such as USDC, while destablecoins such as HAY will use decentralized assets such as BNB. Destablecoins are fully decentralized.Like other crypto-backed stablecoins, destablecoins will utilize the overcollateralized model backed by crypto assets such as DAI. Currently, there are four main types of stablecoins, Fiat-backed (BUSD), Crypto-backed (DAI), Algorithmic (USDD), Commodity-backed (PAXG). Destablecoins differ from the conventional 4 stablecoin types that currently exist in the market.
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