The Cardano blockchain has been under development for quite some time, and the progress is phenomenal. In January, Emurgo announced that a stablecoin called AgeUSD would be launching on Cardano, and this process seems to have hit an accelerated pitch.
Emurgo has announced that it is in a partnership with Ergo Foundation and the IOHK for stablecoin development. The stablecoin will be launched once smart contract capabilities are enabled on Cardano.
While the Cardano-based stable coin has taken a long time to come through, it will avoid many pitfalls that have befallen other stable coins in the past. According to Emurgo, one of the issues it aims to avoid is the black Thursday event on the MakerDAO.
The issue was in the DAI’s collateralized system that led to a huge liquidation. This led to an under-collateralization of $4 million DAI.
AgeUSD avoids this problem by using something called Staticoin protocol. This system does not use collateralized debt positions. Instead, the stablecoin will be heavily automated within the protocol’s math.
On top of that, ADA will be enabled on it, allowing its use in minting reserves for the stable. This is one of the aspects that sets it apart from the MakerDAO that uses multiple cryptos.
It is an exciting development that could see Cardano rally for the better part of the year. At the moment, it has retested its all-time highs and still gaining.