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ARTICLE · 27 APRIL 2021

Why Are Stable-Coins Best Suited For Defi Derivatives?

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Imagine you are placing a bet on a sporting event. There are numerous possible outcomes and the outcomes themselves are highly volatile.

United KingdomFinance and Banking
Vaibhav Kadikar
Vaibhav Kadikar

Less risks could result in better returns.

Imagine you are placing a bet on a sporting event. There are numerous possible outcomes and the outcomes themselves are highly volatile. Now imagine that instead of using dollars, pounds, or euros you placed a bet using the betting receipts from another bet which in itself in an unknown outcome. In this situation neither you or the house you are placing bets with would know the actual measurable value in stable terms.

When you make a prediction on the value of an asset at a future point in time and if you get it right, you want to be sure that you will make a positive return on your investment, else the entire trade or participating in a derivatives trade would be pointless. You would never accept losing money on a winning trade.

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