DAi

When I was browsing Coingecko recently, I noticed that the stablecoin USDS has jumped to the 23rd place in the market capitalization ranking. Curious, I did some research and found out that USDS is an upgraded version of DAI, and the MakerDAO protocol behind it has also been upgraded to Sky.
#DAI #MKR #SKY #USDS
Let’s first take a look at MakerDAO, and then talk about upgrading Sky. This article is divided into two parts:
Previous article: MakerDAO’s product structure and principles
Next article: Sky's product structure and upgrade content
Today let’s talk about the previous article - the product structure and principles of MakerDAO.

The stablecoin market has surpassed $200 billion in total value, marking a development in the cryptocurrency space that reflects the growing role of stablecoins in enabling crypto trading, decentralized finance (DeFi), and payments. Stablecoins like Tether (USDT) and USD Coin (USDC) continue to play a central role in facilitating liquidity and bridging traditional and digital finance.

What Are Stablecoins?
Stablecoins are digital assets designed to maintain a consistent value, typically pegged to fiat currencies such as the U.S. dollar or other reserve assets like gold. Unlike other cryptocurrencies, stablecoins aim to reduce volatility, making them useful for transactions, DeFi applications, and as a stable store of value during market fluctuations.
USDT and USDC are among the most utilized stablecoins in the market, providing liquidity and supporting a wide range of blockchain-based applications.
Tether (USDT):
Tether’s USDT continues to dominate the stablecoin ecosystem with a circulating supply exceeding $139 billion. Its adoption spans centralized and decentralized platforms, making it a key player in the cryptocurrency ecosystem.
Key Features of USDT:
Liquidity: Widely used across major exchanges for trading pairs.Global Availability: Integrated across multiple blockchains for seamless usage.DeFi Use Cases: Supports lending, borrowing, and yield farming protocols.
USD Coin (USDC):
USDC, issued by Circle, ranks as the second-largest stablecoin with a market capitalization of $41 billion. Institutions often use it due to its regulatory compliance and transparent reserves.
Key Features of USDC:
Regulatory Alignment: Close collaboration with U.S. regulators to ensure compliance.Programmability: Supports applications in DeFi and smart contracts.Fintech Adoption: Partnerships with financial technology companies enhance its utility in mainstream finance.
Drivers of Stablecoin Growth
Several factors contribute to the stablecoin market’s expansion:
Trading Utility: Stablecoins act as a stable intermediary in trading pairs, providing a buffer against volatility.DeFi Applications: Many decentralized platforms rely on stablecoins for lending, borrowing, and staking.Cross-Border Payments: Low transaction fees and fast processing make stablecoins a practical choice for remittances.Corporate Adoption: Increasingly, corporations are integrating stablecoins into their payment systems, reflecting their broader acceptance.
Emerging Stablecoins and Market Diversity

In addition to #USDT and #USDC , other stablecoins such as Dai (#DAI ) and TrueUSD (#TUSD ) are emerging. Decentralized stablecoins like DAI rely on algorithmic mechanisms to maintain stability. Stablecoins targeting specific regions or applications also contribute to market diversity and innovation.
The #stablecoin market’s $200 billion record highlights its critical role in the cryptocurrency ecosystem. Stablecoins are bridging traditional finance with the digital asset space by providing liquidity, reducing volatility, and enabling blockchain applications.

Fiat currencies, which have been the backbone of the global economy for centuries, are now under threat. Traditional money issued by central banks is gradually losing ground to digital assets, particularly stablecoins. But can they completely replace dollars, euros, and other national currencies? Will this be the beginning of a financial revolution, or just another experiment doomed to fail?
What Are Stablecoins and Why Are They Gaining Popularity?
Stablecoins are cryptocurrencies whose value is pegged to traditional assets (such as the US dollar or gold). The most well-known stablecoins—USDT (Tether), $USDC (USD Coin), and DAI—are used for fast transactions, inflation protection, and bypassing financial restrictions.
Key advantages of stablecoins over fiat:
Speed – International transfers take seconds instead of days.Low Fees – Traditional banking transactions often involve high service charges.Financial Freedom – No strict government or banking control.

But if stablecoins are so efficient, why do fiat currencies still dominate?
Fiat Currencies: A Relic of the Past or an Irreplaceable Tool?
Despite their flaws, fiat currencies have something stablecoins lack—legitimacy.
Legal Recognition – Governments worldwide are reluctant to accept cryptocurrencies as a legal means of payment.Stability – While stablecoins are pegged to the dollar, they depend on issuers who can change the rules at any moment.Control Over the Financial System – Governments are not willing to lose their monopoly on money issuance.

Moreover, the rise of stablecoins threatens traditional banks, which profit from handling deposits and loans. If people start massively switching to digital assets, the banking system could face an unprecedented shock.
Bans or Integration? How Are Governments Responding?
Global financial regulators recognize the threat posed by stablecoins. In the US, EU, and China, discussions are underway to impose strict regulations or even outright bans on stablecoins outside of centralized platforms.
However, some countries are taking a different approach. China is already testing the digital yuan (CBDC), while the EU is actively developing a digital euro. This could be a compromise between the traditional financial system and the advantages of digital assets.
Is a Financial Revolution Inevitable?
There are three possible scenarios for the future:
Stablecoins completely replace fiat – An unlikely scenario, as governments will strongly resist it.Fiat and stablecoins coexist – The most realistic outcome, where banks integrate stablecoins into the traditional financial system.Stablecoins disappear due to regulation – A possibility if governments decide to fully monopolize digital money.
In any case, traditional currencies will never be the same again. The financial revolution has begun, and the main question now is: Is the world ready to live without fiat?


#USDT #USDC #DAI