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Lin Alden also noted that the UST stablecoin attracted investors with high yields, but could not be used as a means of payment.
What happened? Macroeconomist Lin Alden said most altcoins are based on unsustainable business models. She explained that many projects intentionally sell assets at a reduced price in order to make a greater profit. According to Alden, with such models, after the initial explosive phase of revenue growth, altcoin developers can raise prices. However, this will only work if the asset is claimed on its own, and not because of low value.
What else did Alden add? The expert believes that a similar model was at the heart of the Terra project: investors were attracted by high profitability, but the unstable structure of the UST did not allow the asset to be used as a means of payment. The economist added:
“If you sell $20 bills at $10 a piece, the revenue growth is going to be huge and the total market is going to be almost endless. But, of course, it’s unsustainable.”
What happened before? Cryptanalyst Michael van de Poppe spoke about three promising altcoins. He called for buying Chainlink (LINK), Decentraland (MANA) and THORChain (RUNE) as soon as possible.
Also, analysts of the investment bank Goldman Sachs called the condition for the success and viability of algorithmic stablecoins. To do this, projects need to find a wider application for payments in the real economy. The bank noted that stablecoins meet the needs of the cryptocurrency market, allowing investors to trade less volatile assets without difficulties with conversion into fiat currencies.
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