Vitalik: Algorithmic stablecoins are the true DeFi, representing a revolutionary approach to decentralized finance that relies on algorithms and smart contracts to maintain stability without centralized control.

Odaily Planet Daily reports that Vitalik Buterin posted on the X platform stating that algorithmic stablecoins are truly DeFi. He believes that if high-quality algorithmic stablecoins backed by ETH as the underlying asset exist, even if the majority of liquidity is supported by CDP holders holding negative algorithmic dollars, the ability to transfer counterparty risk to market makers remains an important feature. Even if algorithmic stablecoins are backed by RWA, ensuring sufficient collateral through over-collateralization and diversification to maintain adequate collateral when a single RWA fails is also an effective risk improvement for holders. He pointed out that the industry should develop in these directions and gradually move away from using the US dollar as the denomination unit, shifting toward more universal diversified indices. Additionally, currently depositing USDC into Aave does not fall into the above categories.