American entrepreneur and staunch crypto advocate, John McAfee, has argued for the importance of stablecoins for decentralized exchange adoption.
American entrepreneur and staunch crypto advocate, John McAfee, has argued for the importance of stablecoins for decentralized exchange (DEX) adoption.
McAfee made his argument in a tweet posted on Oct. 20.
Stablecoins as an interim solution
McAfee’s video begins by tackling the main obstacle to crypto-fiat currency conversions that use of a decentralized exchange poses for users:
“What’s the main issue with decentralized exchanges? It’s how do you get your fiat currencies in and out? […] very difficult, since no information is collected on a decentralized exchange, no name, no address, no social security number, no email, nothing.”
Rather than find a mechanism for fiat conversions, McAfee outlined his vision for a reality in which national fiat currencies become increasingly irrelevant and a plurality of cryptocurrencies are sufficient to meet individuals’ needs:
“Imagine a world six months from now, a year from now, two years from now, where fiat currency is diminishing in importance, you can only buy houses and cars and shoes with crypto, with Bitcoin and Monero and Ethereum and others […] soon we’ll have the ability to acquire everything that we need with crypto.”
McAfee then proceeded to qualify his vision by proposing that — presumably in the interim — stablecoins such as DAI can help reduce the need for DEX users to be concerned about fiat withdrawals.
The DAI, he noted, is programmed via smart contracts to never lose dollar parity by more than one percentage point — no matter the situation on the cryptocurrency markets:
“Imagine getting your currency out [of a DEX] in DAI, it’s always going to be worth a dollar.”
Any ETH-based token (ERC-20 standard) — such as DAI — can be added without a fee to the beta version, with more unspecified tokens to be supported in the future.
At the time of its launch, McAfee argued in favor of DEXs by underscoring that the crypto community faces the question of whether its aspirations are limited to merely expanding the possibilities for pure speculation — “all about money” — or are about an ideal, namely freedom.
As of January 2019, a survey of over 400 international crypto exchanges had indicated that decentralized platforms accounted for just 19% of the global exchange ecosystem, and their trading volumes amounted to less than 1% of those on centralized exchanges.