DeFi protocols launch stablecoins to attract new users and liquidity, but does it work?

DeFi protocols launch stablecoins to attract new users and liquidity, but does it work? – Mail Bonus

Stablecoin projects have been in the spotlight over the past month as the popularity of stablecoin algorithms and the collapse of the Terra project shed light on the important role of dollar-linked assets in the cryptocurrency market.

In response to the vacuum left by ICT, many protocols have released new stablecoin projects in an effort to attract new users and gain liquidity. In general, the DeFi sector is full of gimmicks designed to entice user participation, and it is possible that recent stablecoin promoters are simply the next most popular method used to increase TVL on DeFi systems.

Let’s take a look at some of the latest stablecoins coming on the market and what impact they may or may not have within DeFi.

USDD

One of the largest stablecoin projects that has been launched recently is USDD, the distributed stablecoin algorithm on the Tron blockchain. Since its launch on May 5, USDD has experienced rapid growth in distribution availability, which is now close to 601.86 million and its integration within the Tron ecosystem is relatively widespread.

Growth in the market value of USDD. Source: CoinGecko

USDD is also available on the Ethereum (ETH) network and the BNB Smart Chain (BSC), which has helped to increase the distribution of the tokens as well as providing additional returns.

There are many liquidity options available for USDD owners that offer 20% APY or more in a variety of protocols, including JustLend, SunSwap, Ellipsis and Curve. In the time since the USDD hit the market, TRX has risen 17% from $ 0.07 to $ 0.0818, peaking at $ 0.092 on May 31st.

fUSD

Fantom recently released fUSD, its first native stablecoin, which is over-mortgaged and can be beaten out with Fantom (FTM), USD Coin (USDC), Dai (DAI), SpiritSwap (SPIRIT) and wrapped Tether (fUSDT) as collateral.

In an effort to attract more liquidity, the Fantom Foundation set an 11.3% fUSD mortgage and created a fUSD to USDC exchange interface that allows users to buy fUSD and repay their position to avoid bankruptcy.

At the time of writing, the fUSD is trading at $ 60,993,403 and is trading at $ 0.7112, well below the $ 1 mark.

USD

Following the public announcement of the first parachains within the Polkadot ecosystem, Acala’s diversified financial platform issued USD as the first native stablecoin for the Polkadot project.

aUSD is an over-pledged stablecoin that can be beaten by mortgaging Polkadot (DOT), single Polkadot (LDOT), Kusama (KSM), single KSM (LKSM), Acala (ACA) or Karura (KAR) as collateral.

By mortgaging LDOT and LKSM as collateral, DOT and KSM allow owners to continue to earn winnings at the same time as they can borrow insurance against their property.

On March 23, Acala joined nine other parachain teams to launch a $ 250 million “aUSD ecosystem fund” designed to support early-stage start-ups that plan to build strong stablecoin uses on any Polkadot or Kusama parachain. which is.

As of May 31, $ 6.31 million has been hit and the amount of mortgaged shares locked in Acala stands at $ 91.53 million.

Connected: The UK Government is proposing further safeguards against the risk of stablecoin failure

OUSD

OUSD origin protocol, is a stablecoin that is fully supported by better known stablecoins such as USDC, USDT and DAI.

Market growth OUSD. Source: CoinGecko

Users can currency OUSD by mortgaging their stablecoin collateral on the Origin Dollar protocol and earn a 12.79% return by keeping the OUSD in their wallet. The return paid to OUSD owners comes from automated methods controlled by smart contracts that put the money invested in working in DeFi.

After briefly falling to a low of $ 0.967 on May 12 during the peak of the UST fall, the OUSD has mostly kept above $ 0.996 and has a current supply of 63,605,444.

The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.