2026-01-07 19:26:20

The Truth About Stablecoins: Debt Holders Are the Real Heroes in Maintaining Stability

Why can listDAO's lisUSD maintain a $1 price? Many believe it's supported by official market-making funds behind the scenes, but that's not the case. The brilliance of this system lies in — the borrower is also the arbitrageur.

What happens when lisUSD drops below $1? The protocol doesn't directly intervene to rescue the market but leaves the opportunity to the savvy debtors in the market. They can buy lisUSD cheaply on the secondary market, then use it to repay CDP debts, earning arbitrage profits while providing buy-side support, and simultaneously reducing the circulating token supply. Three benefits in one move.

The clever design shifts the cost of maintaining the stablecoin from the protocol to the users, using profit incentives to encourage active participation. But this also means whether the system can truly withstand tests depends on: when the market plunges into extreme panic, are there enough rational borrowers willing to use their liquidity to buy the dip and repay debts?

The true resilience of listUSD essentially depends on a simple game — whether the greed of debtors can outweigh the market’s panic. This is not just a price issue but the ultimate stress test on the liquidity reserves of the entire borrower community.

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ForkItAll

· 01-07 19:54

The core is about gambling on human nature, whether debtors are willing to rush in. --- Basically, it's just transferring the risk to users, smart but still risky. --- Next time real panic hits, you'll see what's real and what's not. --- This logic is actually very fragile; liquidity dries up and it collapses instantly. --- Relying on borrowers to save themselves? Haha, they'll all be cutting losses then. --- It's interesting; it all depends on whether debtors have enough ammunition. --- Stablecoins rely on human greed to maintain stability, which is too dependent. --- Isn't this just a game of musical chairs in the financial world? --- I just want to know who would dare to really buy the dip and pay off debts in extreme panic. --- Throwing the protocol's burden onto users, quite a clever plan.

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GasFeeTherapist

· 01-07 19:47

Sounds good, but when a black swan event occurs, you'll see who really wants to move the money.

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faded_wojak.eth

· 01-07 19:47

Basically, it's about gambling on human nature; debtors need to be greedy enough.

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MEVHunterWang

· 01-07 19:39

Basically, it's just shifting the blame onto retail investors. --- When extreme market conditions arrive, I really doubt these people will still dare to buy the dip. --- Brilliant, protocol wins by default, debtors take the blame, perfect. --- I understand this logic—it's about betting that human greed will overcome fear. --- The real test hasn't come yet; when the crash happens, we'll see how many true heroes there are. --- When people panic, liquidity disappears in seconds; at that point, no one will dare to take the risk.

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