Vitalik: USDC deposit earnings are not DeFi, algorithmic stablecoins are.

Techub News reports, Vitalik Buterin tweeted, "USDC deposit yields are not DeFi. Algorithmic stablecoins are the real DeFi. If we have high-quality Ethereum-backed algorithmic stablecoins, even if 99% of the liquidity is actually provided by CDP holders, as long as you can shift the dollar-side counterparty risk to market makers, that in itself is a significant advantage. Even if an algorithmic stablecoin is backed by RWA, as long as it is overcollateralized and the collateral is sufficiently diversified so that even if any single RWA fails, the whole remains fully collateralized, then compared to ordinary structures, it still represents a meaningful improvement in the risk profile for holders. I think we should try harder to move in that direction (ideally the former, and if not, then the latter). Then gradually move away from using the dollar as the primary unit of account, and build some more comprehensive, more diversified index instead. Of course, the current 'deposit USDC into Aave' play does not fall into either of the categories I mentioned above."