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The blockchain intelligence company wants to prove that Tim Draper is wrong with DeFi

May 22, 2020

The latest Flipside Crypto study aims to refute Tim Draper’s assumption that progress in DeFi will displace the US dollar as the world’s reserve currency.

The report begins by specifying Draper:

“The world of DeFi is almost as technologically advanced as the dollar, and if it does, there will be no one left to accept politically manipulable currencies like the dollar.”

No replacement for Fiat

The report focuses on two stable coins: Dai (DAI) with cryptocurrencies and USDC (USDC) with Fiat. He concludes that stall coin users do not seek these instruments to replace the dollar, but prefer them because of their resistance to censorship:

“People don’t turn to DeFi to replace the dollar. Instead, they use DeFi to avoid censorship, own their assets, and build a financial service without permission.”

Dai flow into the crypto ecosystem. Source: Flipside Crypto

The blockchain intelligence company wants to prove that Tim Draper is wrong with DeFi
The blockchain intelligence company wants to prove that Tim Draper is wrong with DeFi

Dai flow into the crypto ecosystem. Source: Flipside Crypto

When comparing the two currencies, the report concludes that Dai is more widely used in DeFi apps, while Coinbase’s USDC is more popular with centralized exchanges. This is expected and is in line with previous TokenAnalyst research, which also highlighted that Dai was better integrated into the DeFi ecosystem than USDC or Tether (USDT).

The USDC flow in the crypto ecosystem. Source: Flipside Crypto

The USDC flow in the crypto ecosystem. Source: Flipside Crypto

Since Coinbase launched a USDC / DAI trading pair last year, the exchange has served as a connection node for the two stablecoins.

While it’s clear that stablecoins are far from replacing the US dollar as the dominant global player, this doesn’t necessarily prove that Tim Draper is wrong. It may be that the DeFi room is still in its infancy and only takes the first painful steps into a brave new world.

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