A new algorithmic stablecoin called AgeUSD will be launched on the Cardano blockchain making it a first for the network
Cardano’s ambitions (ADA) are increasingly evident, not just stop at continuously performing optimal upgrades for the network. Recently, Cardano is ready to launch a new stablecoin – AgeUSD – built on its own blockchain for the first time.
📢Algo stablecoin Release! AgeUSD is a novel crypto-backed algorithmic stablecoin protocol that has been created in joint partnership by the #Ergo Foundation, #EMURGO, and #IOG on top of the Ergo Blockchain. https://t.co/HxU6wgbntu
— EMURGO (@emurgo_io) January 23, 2021
The Cardano ecosystem is set to see the launch of its first-ever stablecoin, AgeUSD
Multinational blockchain technology company Emurgo initially announced the AgeUSD stablecoin in January 2021. Since then, the company announced a partnership between Ergo Foundation, Emurgo, and Charles Hoskinson’s Input-Output Global, IOHK’s parent company.
The new stablecoin called AgeUSD will be launched on the Cardano blockchain, becoming the first stablecoin for the network. AgeUSD will be available on Cardano as soon as smart contract capabilities are launched on the blockchain provided by Plutus. According to the roadmap. Expected to be completed by the end of this year.
AgeUSD’s so-called “Staticoin” protocol-inspired design does not rely on collateralized debt positions (CDPs).
“Thanks to its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we do not have liquidation events nor the requirement for users to perform transactions to ensure that the liquidations actually work properly.”
The information comes amid rising demand for stablecoins as Bitcoin has just set a new ATH peak at $ 64,836, the rising heat is expected to peak. As a result, Ethereum (ETH) broke $ 2,500 after the successful Berlin hard fork and a series of other coins also showed a strong uptrend.
Stablecoins have always dominated crypto trading pairs, and it is clear that such a market craze has triggered the value of stablecoins in circulation.
This year, Tether capitalization (USDT) surpassed $ 40 billion. Behind the stablecoin kings, USDC is threatening the “position” of the giant PayPal when the transaction volume increases significantly. If not convincing enough about the influence of stablecoins, look at the Tether (USDT) war on the blockchain, Tron surpasses Ethereum, reaching 24 billion USD.
AgeUSD was born to prevent events such as MakerDAO’s “dark Thursday”, which emerged through loopholes in the Dai mortgage mechanism. The mass liquidation of the majority of Maker’s vault led to about $ 4 million in Dai being under-mortgaged as of March 2020.
This is a surprising and wise move by Cardano, giving the platform new land to exploit in the market. This partnership will also allow Cardano (ADA) to be used as collateral in addition to Ergo (ERG). However, the potential downside is that AgeUSD is only supported by the above choice, while Dai is backed by many different coins.
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