The development of the DeFi ecosystem will not lead to the replacement of the US dollar

An analysis published by Flipside Crypto seems to contradict Tim Draper’s hypothesis that the development of the DeFi ecosystem will lead to the replacement of the US dollar as the world’s reserve currency.

The report begins by quoting Draper:

“The DeFi world is almost as technologically advanced as the dollar, and when it reaches that level, no one will want to accept politically manipulable currencies like dollars.”

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The Flipside Crypto analysis focused on how two stable cryptocurrencies are used – DAI and USDC. Their findings were that these assets are not used as substitutes for the dollar, but for their resistance to censorship:

“People do not use DeFi to replace the dollar. Instead, they use DeFi to avoid censorship, to control their assets and to build an independent financial service ”.

The development of the DeFi ecosystem is still in its infancy

Comparing the two currencies, the report concludes that Dai has a greater use in DeFi applications. USDC, on the other hand, is more used on centralized exchanges such as Coinbase. These findings confirm previous research by TokenAnalyst, who also pointed out that DAI was better integrated into the DeFi ecosystem than USDC or Tether (USDT).

Since introducing the USDC / DAI trading pair last year, Coinbase has served as a connector node for the two types of stable cryptocurrency.

While it is clear that stablecoins are far from replacing the US dollar, the conclusions of Flipside Crypto do not necessarily prove that Tim Draper is wrong. The DeFi space may still be in its infancy and still has the power to revolutionize traditional financial systems.