The Real Problem With Non-USD Stablecoins

Non-USD stablecoins struggle to gain on-chain adoption mainly because liquidity providers in FX pools suffer impermanent loss that makes participation unsafe, according to the article's argument. Aishwary deployed an XSGD/USDC pool with a narrow concentrated-liquidity range matched to the real SGD to USD trading band, and a routine exchange-rate shift pushed the pair out of range, after which arbitrage bots drained the XSGD side. The article cites an Artemis chart, based on its October dataset, showing USD-denominated stablecoins account for almost all circulating supply. Aishwary, after discussing the problem with a liquidity strategist, shared a potential mechanism that could let FX pool LPs recover IL over time.