Right! Focusing on Maker, the long-tail risk of USDC collateral being blacklisted by Coinbase/Circle is not well understood and difficult to quantify. Maker's USDC/USD oracle is hardcoded at $1, so it's unclear what would happen if USDC collateral was blacklisted or by what mechanism the system would self-heal.

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USDT demand has ballooned in China because the liquid of USDT/CNY of OTC in OKEx, Huobi and Binance and other main exchanges is higher a lot than other stable coins.

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"We later learn that a horrible criminal has also deposited USDC into that pool and as a result, the USDC in that pool gets frozen. When the user goes to withdraw their funds, they don’t get their USDC back. Depending on how the pool is constructed, they might not get anything back!

This example isn’t likely to happen (it’s a toy example!)"

Why isn’t likely this example to happen? I think it's very easy for criminal launder their assets on ETH chain via Defi because the contract of Defi doesn't know whether the asset is clear or not.

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What do you think about the risk of nation state attack, for all three types of stable coins?

During one of the hearings of Zuckerberg, US officials told him that US Dollar is much more than a currency, and that it gives them the geopolitical power of sanctioning countries and other powers, and eventually asked him if he is aware that Libra is a threat to this power.

If the US gov eventually sees stable coins as a serious threat to its political power, they would want to destroy them.

Upper half of the quadrant is very easy for regulators to kill.

DAI and similar types can be destroyed with a 51% hash power attack. US Gov can easily obtain this hash power.

What are your thoughts on this?

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Yeah, I've heard @aantonop and other talk about the coming war on crypto and your toy example makes a good point on a possible attack vector.

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