Work

In this article, we want to learn from traditional banking to see how it might help us understand decentralized stablecoins better. We're not saying that decentralized stablecoins are just like banks – there are lots of differences, and we'll explore those in future discussions. But, banks have been a key part of the world's financial system for centuries, so we believe studying them can give us some valuable insights for running decentralized stablecoins.

This memo discusses and compares the different T-bill-like products that have emerged in DeFi since the beginning of 2023. At their core, these products offer exposure to T-bills and provide access to the risk-free yield in DeFi. We believe these products could prove to be compelling for the stablecoin market given their lower reliance on bank deposits and ability to provide a yield.

We take a principles-based approach to our choice of accounting standards. This means our reports will not reconcile to US GAAP or IFRS, nor should they aim to. We are focused on finding adequate representations of the underlying economic reality of an on-chain protocol, with adaptations to the choices we make for representing smart contracts.

Steakhouse proposed a framework approach to addressing liquidity imbalances in the MakerDAO stablecoin including a dampened redemption curve and time-locked savings vaults

Steakhouse evaluated the suitability of this Lido's liquidity spending for stETH by looking at whether the DAO improve its governance by paying incentives in LDO, whether paying incentives helps sustain a closer exchange rate and whether the DAO should aim to sustain a large cushion of liquidity to protect looped staking

Despite a challenging 2022, MakerDAO closed the year with a positive surplus and groundbreaking new developments in real-world assets.