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After Tron and NEAR Protocol announced decentralized algorithmic stablecoin plans, IOST has now joined other crypto platforms to dive into the algorithmic stablecoin space.
The success of Terra’s UST stablecoin has led to new entrants exploring this important asset class in the crypto market. IOST through its stablecoin wants to further improve the benefits of decentralized algorithmic stablecoin by introducing stability and long-term added value.
IOST Plans To Launch Decentralized Algorithmic Stablecoin
Stablecoins play a vital role in the crypto ecosystem and the IOST doesn’t want to be left out to explore the opportunity, said the company in an official post on May 5.
IOST plans to solve three main problems with its algorithmic stablecoin. It aims to ensure the authenticity of oracle price feeds, control scarcity to ensure price stability and deflationary costs, and reduce short-term price volatility through a price arbitrage model.
IOST believes its strong community, technical support team, and multi-chain ecosystem provides a better foundation for decentralized stablecoin. Moreover, a stablecoin could further advance real-world use cases and strengthen the IOST ecosystem.
The IOST Foundation will support the decentralized stablecoin by ensuring funding and resources for it. This would help increase the adoption of IOST’s algorithmic stablecoin, making it a higher annualized interest rate and lower-risk stablecoin against its competitors.
The decentralized blockchain network already supports many stablecoins on the IOST blockchain, such as cross-chain stablecoin iUSD, Xigua Finance functional stablecoin XUSD, and Japanese Yen stablecoin JPYA.
Tron and NEAR Protocol Stablecoin
The success of Terra’s UST stablecoin brought two L1 blockchain entrants into the field, Tron and NEAR Protocol. In fact, NEAR Protocol’s USN stablecoin launch in April and Tron’s USDD stablecoin launch on May 5 have gained attention from the crypto industry. Also, the increased trading volume for both algorithmic stablecoins pushed prices more than 20% higher.
IOST will look to explore the opportunity of algorithmic stablecoin space to further improve its user base and adoption.
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