A Bitcoin-Blockchain-based Decentralized Finance (Defi) project debuted a Stablecoin fully supported by Bitcoin
BTC$ 104,748.51
Tokens as part of his efforts to build a financial system, aimed at the largest and oldest cryptocurrency.
Elastos, developer of the Bel2 protocol, revealed his Bitcoin Dollar (BTCD) on Wednesday.
The aim of the project is to make a digital version of the Bretton Woods system, the agreement after the Second World War that the US dollar has linked to gold, making the Greenback the reserve currency of the world to promote monetary stability. Elastos said it “is being presented again [Bretton Woods] With Bitcoin in the core. “
Stablecoins are tokens linked to the value of a traditional financially active, such as a Fiat -VuvuTa, usually the dollar. They are an important gear in the cryptocurrency machine because they prevent the volatility of cryptocurrencies such as Bitcoin, allowing users to keep capital in digital assets without having to deal with wild price fluctuations.
Dollar-Pegged Stablecoins are usually supported by short-term American treasury that can easily be redeemed or purchased to meet the fluctuating demand.
BTCD is supported by Bitcoin, a counter -intuitive choice for a token that has a stable value. Elastos treats this through overcollateralization of 160% -200% of the value of BTCD in Bitcoin, Ahmed IJ, the head of marketing, Coindesk told Telegram.
“Oracles feed the BTC-usd speed every block,” he said. “If the coverage drops to 110%, arbitration can repay the debt, grab the BTC with a small discount and delete the risk.
“When BTCD is traded above a dollar, holders burn it to reclaim BTC, the offer and the price slides fall. If it drops under a dollar, users mint it with fresh BTC and sales, delivery rises, price lifts.”
The development of a Stablecoin supported by BTC is part of the broader development of Bitcoin-driven Defi, in which the protection of the Bitcoin network and the enormous reserves of BTC are used to secure and financed decentralized activities elsewhere in the blockchain world.
Read more: Stablecoin market could grow up to $ 2T against end-2028: Standard Chartered