Frax’s shift to a fully backed stablecoin signals the end of DeFi’s algorithmic experiment

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Frax’s shift to a fully backed stablecoin signals the end of DeFi’s algorithmic experiment
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The decentralized stablecoin space has shrunk considerably after the failure of algorithmic experiments, but the remaining players are showing strength.

backed stablecoins. The failure of algorithmic stablecoins and depegging of overleveraged stablecoins has become one of the primary reasons for loss of confidence in decentralized stablecoins.Decentralized stablecoins account for 5.5% of the total stablecoin supply. MarkerDAO’s

commands the lion’s share of this with 71% dominance. The transfer volumes of decentralized stablecoins are largely dominated in DAI and have declined since Q3 2022, suggesting that activity across the sector is still inhibited.During the bull run of 2021 and 2022, platforms like Abracadabra and Luna flourished due to higher yields, but when the market took a negative turn these stablecoins were some of the first to collapse.

Besides MakerDAO, Liquity has earned a decent reputation in DeFi as a purely ETH-backed stablecoin platform. Liquity is censorship resistance as it only provides smart contracts on Ethereum, which are not managed by administrators. The total supply of LUSD is 230 million, with LQTY as the utility token of the platform.

The project’s native token, LQTY, doubled in price after its Binance listing on Feb. 28, 2023. There was alleged insider trading activity behind the price surge

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