Published on juni 22, 2024, 12:26 am
Image source: Fox News
```json [ "TLDR: Tethered assets aim to mimic real-world asset values like US dollars or gold. Tether (USDT) is a famous example pegged 1:1 with USD but faces scrutiny. Alloy by Tether introduces AUSD₮ backed by Tether Gold, providing stability with smart contract minting and regulatory compliance. AUSD₮ leverages overcollateralization for solvency and liquidation protection, supported by vaults and fees. It combines USD stability with gold's value, offering DeFi integration and passive income potential." ] ```
Tethered assets, also known as stablecoins, are digital tokens designed to mirror the value of various real-world assets like the U.S. dollar or gold. These assets are backed by collateral such as gold, fiat currency, or a mixture of assets to provide flexibility and risk management options.
One significant example of a tethered asset is Tether (USDT), which aims to maintain a 1:1 peg with the U.S. dollar by ensuring its reserves match the quantity of USDT in circulation. However, Tether has faced scrutiny and regulatory challenges concerning depegging events.
To enhance transparency and compliance with regulations, Tether undergoes independent attestations regularly. For instance, in April 2024, Tether completed a System and Organization Controls 2 (SOC) audit to ensure the highest level of security compliance.
Alloy by Tether introduces AUSD₮, which is minted using smart contracts compatible with Ethereum Virtual Machine (EVM) and supported by Tether Gold (XAU₮), representing physical gold. Utilizing XAU₮ as collateral gives AUSD₮ stability linked to gold’s scarcity and low volatility.
Alloy by Tether aims for regulatory compliance through entities authorized by the National Commission of Digital Assets in El Salvador to manage AUSD₮ issuance. The platform allows users to interact through a user-friendly interface on alloy.tether.to while ensuring that only verified Ethereum addresses with completed KYC checks can engage with smart contracts directly.
AUSD₮ leverages overcollateralization, vaults managed through smart contracts for minting and verification processes, plus liquidation mechanisms ensuring system solvency against undercollateralization risks.
Users mint AUSD₮ tokens by backing them with more XAU₮ than their face value through vaults that monitor solvency levels proactively. Liquidators intervene if positions approach liquidation thresholds to ensure system integrity.
The Alloy ecosystem entails fees related to minting new tokens, redeeming existing ones, and managing liquidations due to falling collateral values below acceptable levels. These fees ensure operational costs are covered while incentivizing liquidators during liquidation events.
Stability stemming from being pegged to the U.S. dollar alongside the intrinsic value of gold supports AUSD₮ as a secure investment option within the Ethereum blockchain environment offering diverse DeFi integration opportunities.
Users looking for U.S. dollar stability might prefer USDT, whereas those interested in gold exposure could opt for XAU₮; meanwhile AUSD₮ combines both features offering yield generation prospects through unique overcollateralization practices.
Therefore, Alloy by Tether’s AUSD₮ advances stability, security, and transparency within their platform while further developing methods for passive income generation through digital asset investments.
Original article posted by Fox News
