deUSD Launch: A New Synthetic Stablecoin from the Elixir Team
Date: 2024-08-05 Author: Henry Casey Categories: BUSINESS
The Elixir team has announced the launch of a new synthetic stablecoin, deUSD, which is positioned as fully decentralized and pegged to the US dollar. This event took place against the backdrop of the ongoing development of the modular blockchain project Elixir, which previously raised $7.5 million in a Series A round in October 2023.
Issing Mechanism and Collateral
deUSD is issued by pledging stETH and sDAI crypto assets. These assets are used to trade short Ethereum, creating a delta-neutral position. This means that the value of deUSD is supported by arbitrage mechanisms, ensuring the stability of the synthetic stablecoin against the dollar.
One of the key benefits of deUSD is the potential for additional income for stakers. The developers promise that users staking deUSD will receive exchange incentives for providing liquidity, in addition to the usual reward for locking assets.
In addition, the Elixir team highlighted the following benefits of the new stablecoin:
- Complete decentralization: deUSD can be issued by anyone.
- Reduced basis risk: deUSD helps reduce the risks associated with imperfect hedging.
- Stable collateral: The asset is backed by stable collateral in the Elixir ecosystem.
The role of deUSD in the Elixir Ecosystem
The Elixir team emphasizes that deUSD will be a key component of their ecosystem, serving as the preferred liquidity collateral in the order books of decentralized and centralized exchanges. Most integrated DEXs will accept deUSD as collateral, which will lead to additional open interest and an increase in the total value locked.
While deUSD is not directly opposed to Ethena's USDe, the latter is the main synthetic dollar in the segment. Like deUSD, USDe is also pegged to the US dollar and provides exchange rate stability through arbitrage mechanisms.
The launch of deUSD by the Elixir team is a major event in the world of decentralized finance. The new synthetic stablecoin, backed by stETH and sDAI collateral, offers users new opportunities for income generation and improved liquidity. Full decentralization and stable collateral make deUSD an attractive instrument for participants in the Elixir ecosystem and the cryptocurrency market as a whole.
