A decentralized finance project (DEFI) based on Bitcoin Blockchain debuted a stable completely backed by Bitcoin
Tokens as part of their effort to build a financial system focused on the largest and older cryptocurrency.
Elastos, developer of the Bel2 protocol, presented its Bitcoin Dollar (BTCD) on Wednesday.
The project aims to create a digital version of the Bretton Woods system, the following World War II agreement set by the US dollar to gold, which makes Back Green the world reserve currency as a means to promote monetary stability. Elastos said he is “reinventing [Bretton Woods] with Bitcoin in its nucleus. “
The stable are tokens linked to the value of a traditional financial asset, such as a fiduciary currency, usually the dollar. They are an important gear in the cryptocurrency machine because they counteract the volatility of cryptocurrencies such as bitcoin, which allows users to maintain capital in digital assets without having to take into account wild price changes.
The paste stable in dollar are generally backed by the United States Treasury Bonds in the short term that can be easily charged or buying to meet the fluctuating demand.
BTCD is backed by Bitcoin, a contradictory option for a file that is average of maintaining stable value. Elastos deals with this through overcop
“The oracles feed the BTC-USD in each block,” he said. “If the coverage falls to 110%, the arbitration can pay the debt, take the BTC with a small discount and erase the risk.
“When BTCD quotes above a dollar, the holders burn it to recover BTC, supply drops and price slides. If it is submerged below a dollar, users accommodate it with fresh BTC and sell, increase increases, price elevations.”
The development of a stablecoin backed by BTC is part of the broader development of Bitcoin, in which the safety of the Bitcoin network and the vast BTC reserves are used to ensure and finance decentralized activities in other parts of the world of Blockchain.
Read more: Stablecoin Market could grow to $ 2T at the end of 2028: Standard Chartered
