2020 was the year of decentralized finance. It saw the rise of hundreds of DeFi apps, yield-farming tools, algorithmic stablecoins, and several other avenues revolving around one major theme: How to put one’s passive crypto holdings to generate even more crypto?
Today, Stably CEO Kory Hoang discusses just that. Hoang, the CEO of stablecoin-as-a-service firm Stably, sat down with Alex Fazel, the host of crypto edutainment show Cryptonites, to discuss the rise of stablecoins in a yield-starved environment alongside the upcoming growth of Bitcoin.
As a bit of background, Hoang started Stably in 2018 after raising over $500,000 from venture funds like 500 startups and BEENEXT along with co-founder and firm CTO David Zhang, who met Hoang in 2017 at an algorithmic trading meetup in Seattle.
Hoang and Zhang previously worked in low-frequency trading of commodities and speculative assets that exhibited high volatility and trend-persistent price anomalies, such as gold ETFs, VIX ETNs, and cryptocurrencies.
In 2017, after quitting their day jobs, they worked towards building Stably, a trustworthy and transparent solution for consumers and investors to issue their own stablecoins worldwide.
Yield-farming in a low-interest world
As a stablecoin entrepreneur, Hoang is unsurprisingly very bullish about the growth of stablecoins in the future, especially in the areas of payments and international settlement. “I’m very bullish on stable coins and other foreign currencies that I believe will come out in droves this year. I’m also very bullish on stable coins that are more than just fiat-backed,” he told Fazel.
What Hoang referred to was the rise of algorithmically-backed stablecoins in the past few months, which, unlike fiat-backed stablecoins, are backed by other cryptocurrencies or even change their circulating supply to match market demand.
He noted, “What we are starting to see now is, you know, generation two, three, and four. Generation twos are decentralized stable coin that may take in generation once they will coin as part of its collateral,” adding:
“An example of this is MakerDAO and Dai. It’s multi collateral.”
Rushing into buying Bitcoin? Don’t
For his initial segment, Hoang recommends newcomers avoid FOMOing into Bitcoin and planning out a stabler investment strategy instead. “All my friends I haven’t heard from in like 10 years heading me up now. Like, “Hey, what do I do with Bitcoin. Should I buy?” My number one piece of advice to anybody? Don’t buy everything all at once upfront. Look into what dollar-cost averaging means.”
Hoang further noted that longer-term investing was the way to go with BTC:
“Don’t buy everything upfront, buy a little bit every month, every week, every quarter or every year so that you don’t put everything up front and it drops on you.”
And even if you were the more adventurous type, that is to step into the intellectual world of algo trading and quantitative analysis, Hoang says to avoid chasing big money, and instead concentrating on compounding your bets.
Want to know the expanse of the algo stablecoin market? More of Hoang’s crypto anecdotes? Or how Vietnam is a major market for stablecoins? Check out the entire episode available for streaming right below!