Revisiting Stable Value Protocols

In recent years, there have been numerous stable value protocols (SVP) emerging to address the challenge of providing a stable and censorship-resistant unit of account. This is particularly challenging as the collateralization of a stable value asset is typically either highly volatile or highly centralized. It should be noted that the term "stable value" is used here because this research piece will also look at some protocols that sacrifice short-term price stability for censorship resistance, such as Ampleforth. However, stablecoins can also be considered SVPs in general. 

While the TerraUSD (UST) fiasco gave stablecoins a bad reputation, especially algorithmically-controlled ones, it should be noted that UST was endogenously-collateralized, which ran the risk of a death spiral. However, there are other unique mechanisms that can deliver a stable unit of account without that risk.