Joe Lubin, the co-founder of Ethereum and the founder of blockchain software tech company ConsenSys, believes controversial stablecoin Tether will eventually be replaced by a more efficient price-stable token. He calls out MakerDAO’s Dai and Circle’s Centre as two strong contenders that could stabilize the cryptocurrency ecosystem.
MakerDAO’s stablecoin, Dai, is designed to bring stability to the markets by overcoming price volatility through a feedback mechanism that incentivizes holders to stabilize the Dai’s value. It’s backed by the US dollar and runs on the Ethereum blockchain.
In an interview with Yahoo Finance, which is steadily increasing its coverage of and exposure to cryptocurrency, Lubin explained his position on Tether, the controversial stablecoin that may or may not be behind Bitcoin and altcoin price manipulation:
“So Tether’s an interesting project. It’s one of the early price-stable tokens that tracks the US dollar. Based on our analysis, which involves just talking to a bunch of people in the space, we do believe that Tethers are backed 1:1 by US dollars in bank accounts. But it’s still not 100% solid in terms of a story, from my perspective.
I expect many other price-stable tokens will arise and take its place. MakerDAO’s Dai is doing incredibly well. It’s a mechanism that maintains price stability. Circle Centre’s price-stable token, I think, is going to be a really profound project that will be a more decentralized version.
And with respect to market manipulations, I’m not sure market manipulations are related to Tether directly, if they do exist. It has been an unregulated market, a set of exchanges that enable big players to do what they want to do. We don’t really trade, we just build software. But ideally we’ll get a little better regulation of those centralized exchanges, at least, and we’ll see less sloshing around in price.”
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