Why is censorship-resistance important?
Today’s news revealed to the world why Censorship-resistance is important.
This is exactly what decentralization advocates warn about: CENTRE, the issuer of USDC, has blacklisted an Ethereum address holding $100k of the tokens. CENTRE called a “blacklist(address investor)” function on an Ethereum address holding USDC, effectively freezing the money in the address. The entity, which is a joint venture between Coinbase and Circle, said it was complying to law enforcement.
“Centre can confirm it blacklisted an address in response to a request from law enforcement. While we cannot comment on the specifics of law enforcement requests, Centre complies with binding court orders that have appropriate jurisdiction over the organization,” according to a company statement cited by CoinDesk.
A centralized company blacklisting a single address shows that, these entities can freeze funds arbitrarily. Currently $1 billion dollars are traded on USDC. Circle is financed by Goldman Sachs. This shows traditional financial companies trying to flex their muscles on the decentralized finance.
This is one of the reasons I like SUSD stable coin. SUSD is minted by the stakers of Synthetix. It is only real decentralized stablecoin left in the world at the moment. Currently its volume is close to $20 million. It is 1/1000th the size of Tether
SUSD is a tiny competitor to Tether, BUSD, USDC, TUSD, HUSD and DAI. What is different about SUSD with others is that it is Decentralized, trustless and more importantly, censorship-resistant.
SUSD is so small that you don’t even see it on the chart. But it is very different from the rest of it. It is similar to comparing bitcoin with other fiat currencies like Yen, Euro or Indian Rupees. When you use any of these currencies you are at the whim of the central banks of those issuing currencies. You can easily be censored by them.
Winner takes most markets apply to most realms of life, I believe there may be a future where we have three main stablecoins
- A fully decentralized and trustless version for use within the decentralized world
- A regulated version aimed more towards large funds, governments, and banks interacting in the space, such as Tether.
- A more consumer-facing, non-crypto native stablecoin for use within applications and casual retail transfers (such as USDC or Libra).
We’ll continue to track how the stablecoin space shakes out in terms of leaders, but the growth in the sector has been strong.