Vitalik Buterin stated on X that some popular yield strategies in DeFi have nothing to do with true decentralized finance. The developer regards them merely as gadgets that fail to address the dependence on banks. He identified algorithmic stablecoins as genuine DeFi. He also proposed two criteria for evaluating them.
The basic level of reliability involves an algorithmic stablecoin collateralized by Ether. Even if the system generates most liquidity through collateralized debt positions (CDPs), the mechanism allows it to transfer dollar risks to the market maker. This preserves the system's autonomy.
The second option permits the use of real-world assets (RWAs) but requires strict diversification. The crash of any single asset in the basket must not destroy the stablecoin’s peg. Consequently, the share of a single RWA cannot exceed the over-collateralization ratio.
Buterin is confident that the industry should strive for these specific models. The global objective is a gradual move away from the US dollar as a unit of account. In the future, a diversified index, rather than fiat currency, must become the benchmark for value.
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