Tether launches its own gold-backed synthetic dollar
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Stablecoin giant Tether has announced the launch of Alloy, its very own synthetic dollar. This new asset, backed by Tether Gold, is meant to bring stability to the digital economy by merging the reliability of gold with a stable unit of account. Also Read: Tether CEO Paolo Ardoino on USDT’s Impact Beyond America Alloy by Tether introduces a new class of digital assets called tethered assets. These assets are designed to track the price of reference assets, maintaining consistent value through strategies like over-collateralization with liquid assets and secondary market liquidity pools. According to Tether, this ensures stability and value parity between the reference asset and its digital counterpart. How Tether’s Alloy works The first token in Tether’s lineup is aUSD₮, a digital currency that mirrors the value of one US dollar. What sets aUSD₮ apart is its over-collateralization by Tether Gold (XAU₮), meaning it is backed by real physical gold stored securely in Switzerland. Users can create aUSD₮ tokens by using Tether Gold as collateral. This allows users to engage in digital transactions, payments, and remittances with a currency as familiar as the US dollar without selling their gold holdings. Credits: Alloy, X.com The system operates on the Ethereum Mainnet, where users can mint aUSD₮ by depositing Tether Gold as collateral. Ethereum-compatible smart contracts manage this process, ensuring transparency and security. These contracts track all collateral and minted tokens, using Price Oracles to constantly evaluate the mint-to-value (MTV) ratio. This setup guarantees that the value of aUSD₮ remains stable and reliable. Also Read: How is Tether triggering stablecoin concerns this time? Tether states that Alloy is an open platform, allowing for the creation of various tethered assets with different backing mechanisms. This includes potential yield-bearing products, offering a modern approach to asset management for institutions. Moon Gold NA, S.A.…
Filed under: News - @ June 17, 2024 7:10 pm