I’m pretty sure everyone is aware of the whole situation in Canada, with the government threatening to freeze civilian bank accounts and therefore you have certain people saying this is free BTC marketing or “this is why crypto exists”. It’s almost like people forget that USDT and USDC also can freeze your wallets which thus makes them no better.
USDT and USDC are stablecoins that should not be used if you value the principles of cryptocurrency. Often, I see people on this sub bashing others for keeping their funds on centralised exchanges like Binance, Coinbase etc. A common phrase I see is, “Not your keys, not your coins” and of course, I understand that storing your assets with any kind of third party does not guarantee your ownership. However, it is hypocritical in a sense, because these same people hold their assets in USDT and USDC which are centralised stablecoins that can blacklist certain wallets and freeze your funds!
UST is the most trusted “decentralised” stablecoin that you should be using. I hear many people say they prefer Dai but let me list some reasons as to why I prefer UST.
Dai is backed by over-collateralized central stablecoins including USDC, thus throwing the whole ‘decentralised’ narrative out the window. Furthermore, Dai is not scalable and will always be limited by scalability due to the fact for every $1 in existence there needs to be >$1 locked. This is the fundamental limitation of all commodity-backed currencies, they cannot expand to satisfy real market demand for them.
On the other hand, UST is not backed by US Dollars, rather it is an algorithmic stablecoin that uses Terra’s reserve asset LUNA to help maintain its peg. In other words, if you want to mint one TerraUSD, only $1 worth of Terra’s LUNA token is burned out of the system. Consequently, this addresses the scalability issues of DAI, as Terra stablecoins can expand rapidly and without bounds to meet the needs of the economy. If there is a lot of demand for dollars, more stablecoins can be minted, if not they are burned to meet demand.