Cardano (ADA) is about to get its first stablecoin — AgeUSD
- Blockchain project Cardano is soon to receive its first stablecoin, known as AgeUSD.
- The stablecoin integration is a result of a collaboration of IOHK, Ergo, and EMURGO.
- It will be a crypto-backed stablecoin, and it might roll out on ADA's blockchain by the end of Q3 2021.
Cardano, the blockchain project behind the 6th-largest coin by market cap, ADA, is about to receive its first stablecoin — AgeUSD. The stablecoin protocol was announced by three entities — EMURGO, the Ergo Foundation, and IOHK itself.
AgeUSD stablecoin to arrive on Cardano
According to what is known, the stablecoin protocol is based on the Ergo blockchain. However, IOHK CTO, Roman Pellerin, explained that it will also be available on Cardano, once the project finally unlocks its smart contract functionality.
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EMURGO, one of the partnering firms, is a multinational blockchain firm that is in charge of creating various solutions for Cardano. This was the firm that announced the stablecoin’s launch on January 24th, during the Ergo Summit 2021.
As mentioned, the stablecoin is based on Ergo’s blockchain, and one thing that makes it stand out is the fact that it is not pegged to any fiat currency. Other stablecoins, such as Tether (USDT), are pegged to USD, and backed by it.
AgeUSD, on the other hand, is a crypto-backed stablecoin, meaning that it does not rely on CDPs (Collateralized Debt Positions). As such, liquidation events for the stablecoin are impossible.
AgeUSD will demonstrate the Cardano chain’s new functionalities
It is also known that AgeUSD will use Ergo’s native coin in its protocol, and that it could, theoretically, be deployed to other chains, aside from Ergo and Cardano. However, due to the fact that both firms are rather closely connected to IOHK, Cardano was the obvious choice.
At the same time, the arrival of the stablecoin will allow IOHK to show off the new functionalities and capabilities of Cardano, following the release of its smart contracts. The joint project will also demonstrate the compatibility of Cardano’s smart contract programming language, Plutus, and ErgoScript.
The only detail that the projects failed to disclose as of yet is when the stablecoin might be rolled out. However, with Cardano’s next phase, Goguen, coming along shortly — it is likely that AgeUSD could be fully operational on Cardano by Q3 2021.