Last week has seen many developments in the Crypto world as AgeUSD, a novel stablecoin will launch on the Cardano network, handing Cardano its first stablecoin. It is a new stablecoin that has been created by Emurgo and Ergo foundation in collaboration with Input-Output Global. Cardano’s ADA is the seventh largest cryptocurrency by market capitalisation.
Recent reports have gone on to show Cardano’s ambition as they have continuously made improvements to match current global trends. The network earlier announced that it will be making Alonzo upgrades sometimes later in the year.
News about AgeUSD was first made public by Emurgo at the beginning of the year. The company subsequently joined forces with Ergo and Input-Output Global to bring the AgeUSD to life. The new coin will be launched on the Cardano blockchain as soon as it is able to run smart contracts with Plutus expected to grant such abilities.
This is no surprise as the circulation of crypto has increased massively around the world as Bitcoin has continued to break barriers, creating room for other Cryptocurrencies to flourish. There has also been significant rise in the value of stablecoins as they dominate trading in the market.
Earlier in the year, Tether saw a notable rise in market cap as it went over the $40 million mark. The position of Paypal and other payment services has also been shaken as the volumes in transactions have also doubled on USDC. Tron also went ahead of Ethereum, reaching $24 million. Stablecoins seem to be in such high regards and AgeUSD is only following the pace being set.
No Collateralised Debt Position, Only Algorithms
The new AgeUSD would use algorithms to maintain its value in place of collaterals. This is to avoid a decrease in the value of the stablecoin as any fall in the value of the collateral is directly a fall in the value of the coin.
It is a known fact that the marketing in crypto comes with some volatility and AgeUSD comes with something different as it offers an approach that is based on rules to determine crypto value. Emurgo made known its aim to make automatic, the arithmetic of the protocol and not rely on changing transaction postings which are likely to collapse when there is too much to process on the blockchain. The design of the AgeUSD has made the prospect of a repeat in Black Thursday occurrences near impossible. The absence of Collateralised Debt Position (CDP) guarantees that as there is no visible loophole to exploit. A very wise move by Cardano, many have touted.
Cardano aims to be an independent system as earlier in February; it allowed users make transactions in their native tokens. Also, the network’s evolution into a multiple asset blockchain is one of the ways Cardano wishes to provide a clear distinction between itself and other platforms that offer similar services.
The network has also partnered with Orion protocol to create a suitable and flexible platform for Defi and NFTs.