​Aptos launches a decentralized dollar stablecoin

What’s new? On November 17, the Aptos blockchain platform launched its own decentralized stablecoin ArgoUSD (USDA) pegged to the US dollar. The stablecoin is fully backed by highly liquid assets, such as the native token of the APT network, stored on the lending protocol Argo on Aptos. A total of 8509,11 USDA has been issued as of 08:20 UTC, with the total value of the locked tokens being 129 605,47.

Information on the USDA website

What else is known about USDA? The stablecoin is issued when a user opens a vault and borrows, after which USDA is credited to their wallet. Argo then charges an interest rate on the debt depending on the type of yield-earning asset. When USDA debt is repaid, the original loan amount is burned and the accrued interest is paid to the treasury of the protocol.

Although USDA is always valued at $1 on Argo, it can be traded off-peg in secondary markets. There are three arbitrage scenarios:

• If USDA is over $1, users with USDA debt can buy it at a discount and repay their loans on Argo at a lower price. This purchase will help to increase the price of the stablecoin.
• If USDA is less than $1, customers can borrow USDA from Argo and sell it for other stablecoins, making a profit. This increase in supply will help lower USDA’s price.
• If the price of USDA differs on two markets (for example, $1,01 on one and $0,99 on another), users can buy it at the cheaper offer and sell it at a higher price. This will help balance the peg across markets.

Since USDA’s value depends significantly on its liquidity, Aptos plans to work with leading automated market makers (AMMs) and decentralized exchanges (DEXs) to list the stablecoin in pairs with other stablecoins and crypto assets.

Earlier, Circle, the issuer of the USD Coin (USDC) stablecoin, announced the launch of the Cross-Chain Transfer Protocol cross-chain bridge, as well as the expansion of support for the Euro Coin (EUROC) stablecoin pegged to the euro by adding the Solana blockchain. The initiative will be implemented in the first half of 2023.