Patrick Dugan (Tradelayer) – HyperCryptoDollarization

When I set out to make a podcast miniseries covering the prospects for crypto-dollars, the question of who actually coined the term ‘crypto-dollarization’ didn’t really occur to me. It was only later that I came to wonder about it. I did a bit of research, and lo and behold, the earliest usage of the term that I can identify comes courtesy Patrick Dugan, in a February 2018 blog post entitled HyperCryptoDollarization.

I read and appreciated the blog post at the time, although the significance of what Patrick was discussing didn’t set it until much later. It was only years later that I realized that Patrick’s proposed stablecoin approach (creating synthetic dollar exposure by going 1x short BTC on a derivatives exchange) was practical, when it was implemented among others by Valiu. (For more on Valiu, see Alejandro Machado’s appearance on the show.)

I’ve known Patrick for a while, and he has been consistent on this theme of crypto-dollarization for years, long before it was a hot topic, so I wanted to get him on the show. In this episode we cover:

  • His formative experiences living under capital controls in Argentina
  • Chile’s inflation-indexed unit of account, the Unidad de Fomento
  • How Patrick’s time in LatAm taught him about dollarization
  • Political drivers of the dollar’s predominance in LatAm
  • How Patrick realized that crypto-dollarization would be important
  • Patrick’s experiences working for the Omni Layer Foundation
  • Patrick’s analysis of the earliest stablecoins like BitUSD, Nubits, and Tether (Omni)
  • Patrick’s explanation of the stablecoin model based on holding spot Bitcoin and a 1x short on a derivatives exchange
  • Patrick’s analysis of the stablecoin models which are most likely to succeed long-term
  • Likely geopolitical effects of crypto-dollarization
  • Patrick’s take on the prospects for Tether

Follow Patrick on Twitter and Medium, and follow his work with Tradelayer here.