MakerDAO, a startup based in India, is setting out to conquer decentralized finance (DeFi) with its new “valuecoin”.
The new ARTH token
MahaDAO's ARTH algorithmic stablecoin is now available on the Ethereum mainnet, according to a press release. ARTH will also be launched on the Matic network at an unspecified date in the future, the team said.
MahaDAO defines the new token as a "Valueecoin" due to its ability to "maintain its purchasing power over time". This is compared to other stablecoins - such as MakerDAO's dai token - which are meant to represent the dollar in terms of price value even when that currency plummets.
“The elastic stablecoin offering is one of the most exciting and innovative verticals within DeFi right now,” MahaDAO co-founder Steven Enamakel said in a statement. “After carefully examining existing algorithmic stablecoins and learning from their successes and failures, we designed ARTH to be much more stable, making it suitable for a range of DeFi applications, from lending to staking, as well as the real world with non-cryptographic use cases. " The majority of the $ 30 billion stablecoin market is made up of collateral backed tokens, such as tether (quotation USDT) or USDC.
The return of the algorithmic stablecoin to the markets
Regardless, a number of algorithmic stablecoins have recently made a comeback as Basis Cash (BAC) or Empty Set Dollar (ESD). These tokens, like ARTH, are not backed by fiat or cryptocurrencies. On the contrary, their anchoring to the dollar, for example, is entirely achieved through algorithms and smart contracts that manage the supply of the issued tokens.
“Users who choose to buy ARTH bonds will have a direct effect on the Uniswap price of the ARTH-DAI pool instead of simply reducing ARTH's supply. This will have a stronger effect on the ARTH-DAI price, resulting in greater price stability for ARTH, ”the statement from MahaDAO said.
This system didn't work for BAC or ESD, as data provider CoinGecko noted that both tokens are far below their expected prices, currently at $ 0,86 and $ 0,58 respectively.
Enamakel reported via a spokesperson that ARTH's algorithm has greater resilience than other algorithmic tokens due to the token's underlying components, including price dynamics tied to a basket of assets, bond purchases on Uniswap, and stability fees. to "dampen bond redemptions".
The distribution of ARTH began on January 16th by placing the assets in the MahaDAO pools. MahaDAO also completed an Initial DEX Offering (IDO) on the Polkastarter platform in December.
