The international blockchain company Emurgo originally announced the age coin USDUSD in January 2021. The company has since entered into a partnership between the Ergo Foundation, Emurgo and Charles Hoskinson’s Input-Output Global, the parent company of IOHK.
Stablecoin AgeUSD will be available on Cardano shortly after the introduction of smart contracts.
Do we need another stablecoin?
Emurgo’s goal is to prevent incidents such as MakerDAO’s Black Thursday from getting gaps in its Dai security mechanism. As a result of the mass liquidation of most of Maker’s vaults, approximately $ 4 million in Dai was not fully hedged by March 2020.
The so-called AgeUSD design inspired by the “Staticoin” protocol is not based on secure debt positions (CDP).
Due to its design, the Black Thursday scenario is not possible for the AgeUSD protocol. Without CDP, we have no liquidation events or requirements for users to complete transactions to ensure that the liquidations actually work properly.
Stablecoin works with the Ergo blockchain and aims to automate as many transactions as possible in the mathematics of the protocol itself. Reserve suppliers pay the home currency Ergo (ERG) to issue reserve coins that represent the underlying security. Stablecoin users can also put ERG in reserves to knock out AgeUSD. This is only permitted by the Protocol if there are sufficient reserves above its reserve quota. Banks use a similar method of lending funds.
The Cardano partnership also enables the use of an ADA-built token as security for issuing reserves. One potential disadvantage, however, is that stablecoin is only supported by these two assets, while Dai is supported by many different cryptocurrencies.
AgeUSD will be launched on Cardano as it introduces the Alonzo update that introduces Plutus-powered smart contracts. According to the roadmap, it is expected during the second half of this year.
Cardano Price Update (ADA)
As the long-awaited update approaches, ADA prices will reach new highs. The most recent ATH took place on April 14 and was $ 1.55.
It is the sixth largest cryptocurrency by market capitalization. There are 32 billion tokens in circulation. Dogecoin managed to push the ADA out of position for a short time, but the coin has already regained its position on the charts.
