Layer by Layer Issue 32: Fantom, NEAR, and TRON

Stablecoins play a vital role in crypto’s on-chain ecosystem today. Fiat-backed stablecoins like USDC and USDT represent one of the few examples where the value of tokens is fully supported by real-world assets, enabling a wide range of use cases that include serving as secure collateral and facilitating on-chain settlement. Some stablecoins like MakerDAO’s DAI are overcollateralized by a mix of fiat-backed stablecoins and crypto-native assets like BTC and ETH, effectively enabling users to permissionlessly access leverage against their crypto holdings. 

In recent weeks, discussion on stablecoins has reached a fever pitch after the collapse of Terra’s algorithmic stablecoin, UST, revealed the extent to which DeFi ecosystems across L1s had become overleveraged on an unstable asset. Regulators in the U.S. and beyond have been quick to pounce on this opportunity to highlight the risks present in crypto today, increasing calls for oversight in the wake of UST’s failure and a broad market selloff across both crypto and equities.