Stablecoin projects have been in the spotlight over the past month with the popularity of algorithmic stablecoins and the collapse of Project Terra, which has brought into focus the important role dollar-pegged assets play in crypto markets.
In response to the void left by UST, multiple protocols have released new stablecoin projects to attract new users and capture liquidity. In general, the DeFi space is full of gimmicks designed to attract user participation, and the recent stablecoin launch plans may just be the next trending strategy to boost TVL on DeFi platforms.
Let’s take a look at some of the latest stablecoins to market, and the impact they may or may not have in DeFi.
One of the largest stablecoin projects to launch recently is USDD, a decentralized algorithmic stablecoin on the Tron (TRX) blockchain. Since its launch on May 5, the circulating supply of USDD has experienced rapid growth, currently approaching 601.86 million, and its integration into the Tron ecosystem is relatively extensive.
USDD is also available on the Ethereum (ETH) network and the BNB Smart Chain (BSC), which helps increase token distribution and provides additional revenue opportunities.
There are multiple pools of liquidity providers available to USDD holders offering 20% or more APY via various protocols including JustLend, SunSwap, Ellipsis and Curve. Since the launch of USDD, the price of TRX has risen 17% from $0.07 to its current level of $0.0818 after briefly hitting a high of $0.092 on May 31.
Fantom recently released fUSD, its first native stablecoin, which is over-collateralized and available with Fantom (FTM), USD Coin (USDC), Dai (DAI), SpiritSwap (SPIRIT), and Wrapped Tether ( fUSDT) as collateral.
The new @FantomFDN native stablecoin $fUSD…
All the benefits of decentralization while providing stability:
✅ Managed by the community. ✅Completely transparent. ✅Over-collateralization stability.
Plus, you’ll be excited to see new collateral assets!
— Stader.Fantom (@stader_ftm) May 25, 2022
To attract more liquidity, the Fantom Foundation set the fUSD staking reward at 11.3% and created a fUSD to USDC swap interface that allows users to buy fUSD and repay their positions to avoid liquidation.
At the time of writing, fUSD has a circulating supply of $60,993,403 and is trading at $0.7112, well below the $1 peg.
Following the official launch of the first parachain within the Polkadot ecosystem, the Acala decentralized finance platform released aUSD as the Polkadot project’s first native stablecoin.
aUSD is an overcollateralized stablecoin that can be minted by staking Polkadot (DOT), staking Polkadot (LDOT), Kusama (KSM), staking KSM (LKSM), Acala (ACA) or Karura (KAR) as collateral.
Staking LDOT and LKSM as collateral allows DOT and KSM holders to continue to receive staking rewards while being able to borrow collateral to pledge their assets.
On March 23, Acala joined 9 other parachain teams to launch a $250 million “aUSD Ecosystem Fund” designed to support early-stage startups planning to build robust stablecoin use cases on any Polkadot or Kusama parachain.
Acala, 9 parachain teams and a group of venture funds launch a $250 million “aUSD Ecosystem Fund” ️
The fund is looking for early stage projects with a strong $aUSD stablecoin use case from any @Polkadot or @KusamaNetwork parachain https://t.co/OJ2V47ZUry pic.twitter.com/NDgLg2bG8N
— Acala (@AcalaNetwork) March 23, 2022
As of May 31, $6.31 million has been minted and the amount of pledged capital locked in Acala is $91.53 million.
Related: UK Government Proposes Additional Safeguards Against Risk of Stablecoin Failure
Origin Protocol’s OUSD is a stablecoin fully backed by better-known stablecoins such as USDC, USDT, and DAI.
Users can mint OUSD by staking their stablecoin collateral on the Origin Dollar protocol and earn a 12.79% yield by holding OUSD in their wallets. The payout to OUSD holders comes from automated strategies managed by smart contracts that use the deposited funds for DeFi.
After a brief dip to a low of $0.967 on May 12 at the height of UST’s impact, OUSD has largely maintained prices above $0.996 with a current circulating supply of $63,605,444.
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