TechFlow news, according to Cointelegraph, Sam Kazemian, founder of algorithmic stablecoin protocol Frax Finance, said that stablecoin projects need to take a more collaborative approach to increase liquidity for each other and the entire ecosystem. Kazemian explained: "As long as stablecoins proportionally increase liquidity by sharing liquidity pools and collateral systems, there will never be real competition between stablecoins. The growth of the stablecoin ecosystem is not a competitive game, because each token becomes increasingly interwoven and dependent on the performance of others."
Kazemian believes that USDC's widespread adoption across the industry, along with greater transparency in its reserves, should make it the most valuable stablecoin within the ecosystem. He described USDC as a "low-risk, low-innovation project," acknowledging it serves as a foundation upon which other stablecoins can innovate further.
Notably, FRAX uses USDC as part of its collateral. Although the FRAX stablecoin is algorithmically partially backed, Kazemian stated that purely algorithmic stablecoins "simply don't work."
