SoK: Demystifying Stablecoins

Communications of the ACM, Forthcoming

21 Pages Posted: 17 Oct 2019 Last revised: 6 Apr 2020

See all articles by Jeremy Clark

Jeremy Clark

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science

Didem Demirag

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science

Seyedehmahsa (Mahsa) Moosavi

Concordia University, Quebec

Date Written: February 15, 2019

Abstract

This papers aims to provide an understandable survey of 'stablecoins'---cryptocurrencies designed to have lower volatility than Bitcoin or Ether. We distil the stability mechanisms into a set of primitives and precisely analyze why they are thought to adjust exchange rates, what assumptions they are based on, and what risks still exist. Stablecoins are interesting to the cryptocurrency community because volatility has hampered spending, increased speculation, and hindered mature lending/credit markets from forming. Our comparison includes pre-Bitcoin digital currencies like Liberty Reserve and e-gold, Ethereum's gas, and novel visualizations.

Keywords: stablecoins, bitcoin, blockchain

JEL Classification: E50

Suggested Citation

Clark, Jeremy and Demirag, Didem and Moosavi, Seyedehmahsa, SoK: Demystifying Stablecoins (February 15, 2019). Communications of the ACM, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3466371 or http://dx.doi.org/10.2139/ssrn.3466371

Jeremy Clark (Contact Author)

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science ( email )

1515 Ste. Catherine St. West
EV 002.139
Montreal, Quebec H3G 1M8
Canada

Didem Demirag

Concordia University, Quebec - Gina Cody School of Engineering and Computer Science ( email )

1515 Ste. Catherine St. West
EV 002.139
Montreal, Quebec H3G 1M8
Canada

Seyedehmahsa Moosavi

Concordia University, Quebec ( email )

1455 de Maisonneuve Blvd. West
H 1225-22
Montreal, Quebec H3G 1M8
Canada

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