Are genuinely decentralized stablecoins still valuable?

It's been a while since I've seen any buzz around truly decentralized stablecoins. Not since the whole Terra/LUNA fiasco in 2023. I'm referring to coins like DAI and USDJ. DAI made some changes and switched to USDS, and now it’s got this "freeze" feature that can kick in if the decentralized governance board gives the nod. This makes USDS more compliant with regulations, which raises some questions about how decentralized it really is. I honestly think that the growing wave of crypto regulations has pretty much killed off the decentralized stablecoins scene. Or am I missing something? Would love to hear your thoughts on this. Thanks!

It's still worth it but the only decentralized stablecoin worth holding is only DAI in my opinion. I usually diversify my stablecoin and it's always between USDC, USDT, and DAI. I really like to keep my stablecoin in DAI but the liquidity in CEX is just low that I don't feel like holding too much. USDS is a bad news though although I hold some.

I don't think we've reasons to panic over the policies surrounding the stable coins when we know that they're not native crypto currencies which was supposed to be completely decentlized. It'll be very misleading of crypto users expecting stable Coins will be be limited to regulatory policies when truly knows that they're just versions of the centralized finance pegged in the crypto industry to control crypto asset volatilities for investors and as well propels friendly transactions within Defi and Cefi. Authorities wouldn't had been there at all but as it's, I believe we'd face even more policies with the use of stable coins in time coming as crypto adoption increases. So we can't say the functionalities of the stable coins is ruined if we truly understand it originality to be values that's being under regulations unlike the crypto currencies that're completely unregulated.

Regulation kills decentralization, we know that the government is going to need control, and this also applies to USDS, to have control because they can freeze the money if there are suspicious origins. And why is it more regulatory because most of the time today what is relied on is CEX for transactions and storage, where they are centralized and of course must comply with existing regulations, including coins that are allowed to exist or not in each market, if only decentralized markets were used more than CEX, of course coins including stable coins would be a priority for use, this hall is closely related to adoption.

I don't think there's anything like "truly decentralized" stablecoins, ever. Maybe it was only stated on paper but in reality, I haven't seen one because there's always one or more entities that are in control of the project that ultimately determines the paths the projects take regardless of what their "decentralized" community decide. Personally, I know that there are no "fully" or "truly" decentralized stablecoins like OP said atm so I just stick to the defaults (USDT / USDC) because there's nothing like halfway bad. You're either centralized or decentralized, no middle ground., and currently none passes as decentralized at least not in my books.

USDJ is up 880% in the past 24 hours according to Coingecko. For a “stable” coin, it is anything but. This just seems to be another Justin Sun scam. USDS is still doing well and has a high market cap. There aren’t many others that are well known, which might be because people are worried about issues that affected algorithmic and collateralized stablecoins in the past. USDS isn’t as risky as Terra USD, but if you are minting it you can end up getting liquidated. Having to worry about keeping a healthy collateralization ratio is not something most people want to deal with and so they choose centralized stablecoins that you can hold without any extra maintenance.

DAI is pretty much decentralized and controlled through governance votes and proposals by MKR holders. The only thing that isn't decentralized about DAI is the fact that it used centralized stablecoin such as USDT and USDC as a collateral to mantain its peg though it make the stablecoin stronger.

What about DAI and the likes? I never heard that there is person in control of them yet, and then I think they are also stable to a dollar. For those stable coins which values can rise over a dollar, and can pump very high, they must be the ones that are not 'true decentralized". And their movements are a clear sign of manipulation. USDT and USDC are both centralized type of stable coins and both experience an issue already, but at this point, they are still standing strong. That makes the people like you to still trust them.

Well, I'm going to say it. Before yesterday, my general assumptions were that there wasn't any decentralized stablecoins and my research so far has proven that. In all, DAI will probably be one of the most decentralized in the end but in reality, it's not because whales can easily collude to manipulate the outcomes of those governance votes. There are other ways it's currently decentralization structure could be tested but that's a story for another day

I think people are lost interest over decentralized stablecoins due to lack of trading pairs and the price aren't stable compared to USDT and USDC. USDS is still worth it because we never know when the government or centralized entities will crackdown against centralized stablecoins, for sure every stablecoins would be affected. But, USDS might likely safe if that situation happened.

It is simply not the same it used to be than when DAI was first deployed and people thought there was actually value in decentralization and decentralized assets, sadly we have a lot of people in the market now who do not value the importance of decentralization and just want things to work properly, disregarding whether it is possible for the operators of the network to freeze people's value with a single line of code. I liked DAI but I don't like what it has become. And in some sense I agree with those who believe the market of decentralized stablecoins is kind of dead, so we have left with no option but to rely on centralized coins.

What about Ethena USDe ? it think it has no freeze option. Regarding decentralization is more or less like any other even DAI is not 100% dencentralized as it depends on his developers. To be fully decentralized stable coin it should run on protocol which will allow anyone to create it and redeem it and the value and emission rate should be decided by community (common people) by democratic voting.

That's true. But I'm afraid DAI is no longer supported by Maker. The latter re-branded to SKY and moved to an entirely new stablecoin (USDS) with a built-in freeze function. Of course, DAI's decentralized nature might keep it alive for long. But without a DAO behind, I wonder which entity would be in-charge of collaterizing the stablecoin? That's the "billion-dollar" question. Centralized stablecoins being used as collateral for DAI is a definitely a concern, but these aren't the only digital assets which help maintain DAI's peg to the USD. I believe DAI is also backed by ETH and a few other cryptos. At least, it's not as bad as other decentralized stablecoins which are backed by algorithms (otherwise known as "algorithmic stablecoins"). Terra's UST stablecoin failed miserably because it was algorithmic. Perhaps, the downfall of Terra/LUNA's UST stablecoin gave a bad perception of decentralized stablecoins in general. Investors will be very cautious when putting their money into a stablecoin such as DAI. I hope truly-decentralized stablecoins do have a future despite their setbacks and criticism. Just my two sats.

Weirdly enough DAI keep getting hundred of millions 24h volume while USDS only got 10m million or around that although FDV is higher, I don't know if it's CMC's error or something but that's a huge difference. It seems people just refuse to upgrade from DAI to USDS and I suspect DAI will lasts for a while. So honestly, I will still use DAI until there is low liquidity and have no choice but to upgrade to USDS. So, although USDS exist with its rather centralized features, I'm not worried yet.

Stablecoins haven't started freezing individual addresses for reasons like fraud, high risk, money laundering, gambling, etc., so we can say that highly liquid stablecoins are safe for small transactions. For amounts UP TO $10,000 or more, I would prefer DAI. For larger amounts, it's best not to use stablecoins and to convert to cash.

Agreed through and through. I myself don't have amounts of $10,000 to throw around anyways, so the choice is pretty simple in that regard. I also didn't have much experience with DAI.

Yeah. DAI is viewed more favorably by the community than USDS itself. Nobody wants a stablecoin that can be easily frozen at will. The only exception are centralized stablecoins. But that's because they have greater liquidity and mainstream acceptance than their decentralized counterparts. What DAI needs is a new DAO to help sustain its future. I mean, which entity is going to take care of collaterizing DAI now that Maker stopped supporting it? Without nothing to back DAI with, it will ultimately become worthless. At least, that's what I think. So far, it has survived with USDS in play. Maybe Maker DAO (now Sky) will change its mind and abandon USDS in favor of DAI? One can only hope. Well, I've read cases where centralized stablecoins (Tether and USD Coin) have "blacklisted" some addresses due to suspicious activity. I think that counts as "freezing" someone else's assets. Even cash can be frozen if it sits in your bank account. The only "safe" way would be to sell your crypto for physical cash in a P2P manner. I believe the next "killer app" would be privacy stablecoins. Especially those built with decentralization in mind. We'll see what happens in the future.

I'm just comfortable with USDT and USC being that it is also more popular and serving the purpose I'm using it for very well, I don't hold those stable coins as an investment but just like a hedge against volatility while carrying out my future trading. It's better I hold Bitcoin thank keep a huge amount in stable coins whether centralized or decentralized, because I don't really think those one said to be decentralized are truly decentralized.

Decentralized stablecoins are of course more safe than centralized ones if you think about it, however that doesn't make decentralized ones as purely secure. Decentralized is great, better than centralized but it comes with its own risks. We have seen so many decentralized projects getting bot attacks and hacks and other things that made them go down before. While some others are safe and secure looking at the moment, that doesn't mean that we are seeing it happen with ease at the moment, just because some of them were not hacked or go down, doesn't mean that others didn't, so we can't say it's 100% fully safe at the moment. What is looking safe today, could be hacked or attacked tomorrow so there is no guarantee.

Individual cases or linked to hacking, such as what happened with Bybit Hack? If the individual cases are related to scam or theft and on a decentralized blockchain such as Ethereum, this is a big red flag. Please add the link because I have never heard of such cases.