OKX Wallet Now Integrated with Cygnus Finance, a Stablecoin Protocol

OKX Wallet Now Integrated with Cygnus Finance, a Stablecoin Protocol

Wonderland, an ultra-high yield DeFi project that boasted a time-to-Lamborghini calculator on its homepage, is down 99.9% from its peak in January 2022. Sestagalli eventually admitted that he concealed the involvement of Omar Dhanani, a.k.a. Michael Patry, a.k.a. 0xSifu in managing Wonderland’s treasury. Dhanani was a co-founder of QuadrigaCX, a failed Canadian crypto exchange. Returning to the Fantom maxi’s incredible story, they claim it all started with Fantom’s not-so-stable stablecoin FUSD, which has been worth anything but $1 for years. Trading wildly between $0.18 and $0.97, FantomUSD is the center of the controversy. A self-described Fantom maximalist has alleged that ‘loyal, OG stakers’ of at least 200 million fantom tokens (FTM) experienced a forced liquidation to the benefit of the Fantom Foundation.

• Just like other stablecoins, TrueUSD aims to facilitate increased liquidity and a trusted non-volatile crypto alternative to the likes of Bitcoin.
• The process is transparent, with all dUSD transactions publicly viewable on the Cardano blockchain.
• Minting and burning DAI occurs when users borrow funds and then repay their loans.
• There are still problems with this innovative model, however; for example, if the smart contracts underpinning MakerDAO don’t work exactly as anticipated.
• If a stablecoin loses its intended value and is unable to quickly recover it, it becomes functionally useless.

Why use stablecoins?

In fact, the European Central Bank insures only bank deposits up to 100,000 euros, a figure significantly lower than the market capitalization of USDT, which amounts to 112 billion dollars. Binance has announced in this regard that it has differentiated its offering between stablecoin “regulated” and “unauthorized”, without however explicitly referring to which coins will be excluded for European customers. The euro is still the “second best choice” compared to other FIAT currencies outside of the dollar in this context, being the second most used currency in the stablecoin field. Already in recent months, several credit institutions have moved to offer their own stablecoin, such as Société Générale with the launch of EURCV.

Different Types of Stablecoins

This decreases the supply of the coin, causing the price to rise back to $1. When it’s above $1, users are incentivized to create the token, increasing its supply and lowering the price. DAI is just one example, but all crypto-backed stablecoins rely on a mix of game theory and on-chain algorithms https://www.tokenexus.com/ to incentivize price stability. To buy stablecoins you’ll need an account with a crypto exchange or a digital wallet where you can buy crypto directly. Some services may not be available in all locations, so be sure to check whether the options you want are available where you live.

Examples of Stablecoins

Even for stablecoins that claim to be decentralised — Ethena, for example — leveraging centralised exchanges to hedge staked assets occurs. Yield-bearing stablecoins represent an important application of RWAs, bridging the TradFi and crypto worlds. They provide an option to earn yields on safe-haven assets while simultaneously opening the gateway for TradFi institutions to participate in crypto adoption, starting with crypto’s least volatile asset — stablecoins. The oldest example of a yield-bearing stablecoin, DAI is over-collateralised by holdings from MakerDAO, which include ETH, USDC, and RWAs like US Treasuries. MakerDAO generates stability fees from its holdings, as well as interest rates from crypto-backed lending. DAI holders do not automatically earn the Dai Savings Rate (DSR), but have to deposit DAI into the Maker Protocol system to get sDAI, in which sDAI’s value increases to reflect the yield accumulation.

DAI is created when users spend a specified amount of ETH to mint new tokens. It relies on an algorithm that ensures users always over-collateralize. That said, even the most dedicated traders sometimes need to step back and catch their breath, particularly when the markets turn negative. You are now leaving the SoFi website and entering a third-party website. SoFi has no control over the content, products or services offered nor the security or privacy of information transmitted to others via their website. We recommend that you review the privacy policy of the site you are entering.

One group of people who often use stablecoins to their advantage are cryptocurrency traders. Some users might prefer this option to other cryptocurrencies, which could hurt their rate of return if the price goes down. A stablecoin adds an element of predictability to financial arrangements. Prior to the event, the TerraUSD project was widely regarded by crypto enthusiasts as one of the most exciting stablecoin innovations. Its demise created a domino effect in the industry, bringing down multiple crypto institutions that had assets stored in UST and accelerating a downturn in the crypto market.

On July 8, 2021, Circle announced plans to go public through a $4.5 billion SPAC merger deal with Concord Acquisition Corp. The news came one month after Circle closed a $440 million funding round involving big industry names such as FTX, Digital Currency Group (the parent company of CoinDesk) and Fidelity Management and Research Company. Skylar Clarine is a fact-checker and expert in personal finance with a range of experience including veterinary technology and film studies.

Critics have cited a potential lack of transparency regarding their reserves of stablecoins. In other words, it can be difficult to know whether the company behind the coin actually holds one dollar for each dollar-backed stablecoin. Stablecoins also don’t have the same consumer protections in place that traditional banks do. Users will need to hold their stablecoin balance via any number of crypto storage methods and the cryptocurrency wallet of their choice. Stablecoins might be best thought of as tools to use in an emerging DeFi system instead of other types of assets. These coins let traders and users of DeFi apps interact with a form of fiat currency directly on the blockchain.

Crypto-backed stablecoins

He somehow claimed to have found ‘the biggest rug pull on Fantom ever’ even though he offered no blockchain evidence. In fact, Woo went one step further and forecasted that the firm might even launch a stablecoin backed by Bitcoin in the future. “Given Tether is building a sizeable BTC treasury, I would not be surprised in a future where they issue bUSDT, backed by Bitcoin,” Woo wrote. Cygnus Finance is a RWA stablecoin protocol built on pure, short-term U.S.