Dear @samkazemian can you pls clarify what would happen with

Question

Dear @samkazemian can you pls clarify what would happen with

the Frax Finance protocol and its USD pegged stablecoin FRAX (and potentially others) if USD/C would go into hyperinflation. Would it be better to loose the peg, what would happen with the Treasury and the capital of investors? Are there any mechanisms in place in case of such situation? Thanks in advance.

#cryptocurrency #english #frax

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25.09.2022

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Logarithmic Rex Salomon

Samuel
1 usdc = 1 usdc Changes to the global money supply...

“As long as the dollar is the global reserve currency they’re can be no hyperinflation” very interesting comment. Can you elaborate?

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25.09.2022

Samuel · Accepted Answer

1 usdc = 1 usdc Changes to the global money supply have zero effect on the supply of usdc or frax Usdc always has enough collateral by legal design. For every 1 dollar of USDC minted there is an equal amount of cash or short term securities held in a bank somewhere by Circle. Hyperinflation would just mean more dollars could be minted as usdc and flow into frax. It would have zero effect on the peg And as long as the dollar is the global reserve currency there can be no hyperinflation. Only a persistent dollar shortage around the world like we are seeing now

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