International blockchain company Emurgo initially announced stablecoin AgeUSD in January 2021. Since then, the company has formed a partnership between the Ergo Foundation, Emurgo and Input-Output Global by Charles Hoskinson, the parent company of IOHK. The AgeUSD stablecoin will be available on Cardano, shortly after the launch of smart contracts. Do we need another stablecoin? Emurgo's goal is to prevent events like MakerDAO's Black Thursday, which occurred through loopholes in its Dai collateralization mechanism. As a result of the massive liquidation of most Maker vaults, some $4 million in Dai was not fully collateralized in March 2020. AgeUSD's so-called "Staticoin"-inspired design does not rely on collateralized debt positions (CDPs). By its design, the scenario that happened on Black Thursday is not possible for the AgeUSD protocol. Without CDPs, we don't have liquidation events or a requirement for users to execute transactions to ensure that liquidations actually work properly. Stablecoin runs on the Ergo blockchain seeking to automate as many transactions as possible within the math of the protocol itself. Reserve providers pay Ergo's native currency (ERG) to issue reserve coins representing the underlying collateral. Users of stablecoin can also deposit ERG into reserves to mint AgeUSD. This is only allowed by the protocol if there are enough reserves above its reserve ratio. Banks use a similar method to borrow funds. The Cardano partnership will also allow the ADA native token to be used as collateral to issue reserves. However, a potential downside is that stablecoin is only backed by these two assets, while Dai is backed by a wide variety of cryptocurrencies. AgeUSD will launch on Cardano when it rolls out the Alonzo update introducing Plutus-powered smart contracts. According to the roadmap, this is expected in the second half of this year. Cardano price update (ADA) As the long-awaited update approaches, ADA prices are reaching new highs. The last ATH occurred on April 14 and was $1.55. It is the sixth largest cryptocurrency by market capitalization. There are 32 billion tokens in circulation. Dogecoin managed to push ADA out of position for a brief moment, but the coin has already regained its position on the charts. Tags ada AgeUSD Cardano dai Maker stablecoins Staticoin USDT
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