Vitalik: Algorithmic stablecoins are the true DeFi

Vitalik Buterin posted on the X platform stating that algorithmic stablecoins belong to true DeFi. He believes that if there are high-quality algorithmic stablecoins backed by ETH, even if the majority of liquidity is supported by CDP holders holding negative algorithmic dollars, the ability to transfer counterparty risk to market makers remains an important feature. Even if algorithmic stablecoins are backed by RWA, if they can ensure sufficient collateral in the event of a single RWA failure through over-collateralization and diversified allocation, it is also an effective improvement in risk characteristics for holders.

He pointed out that the industry should develop in these directions and gradually move away from using the dollar as a pricing unit, shifting towards a more universal diversified index. Additionally, the current operation of depositing USDC into Aave does not fall under the aforementioned category.