Hatom USD
as of 02/01/2025
Stablecoins are essential to every DeFi ecosystem, providing a fast and efficient way to transfer stable value and hedge against market volatility. However, with the variety of stablecoins available, the question arises: why is there a need to develop new stablecoins?
The answer lies in market demand. The adoption of decentralized stablecoins is still relatively limited, which presents a significant opportunity for growth. In the MultiversX ecosystem, there is currently a shortage of stablecoins, with only a small market cap for those available. Additionally, all existing stablecoins must be brought into the ecosystem via bridges, which introduces security risks and high fees. This highlights a gap in the market—one that Hatom can address by developing innovative stablecoins that better meet the diverse needs of DeFi users, while also enhancing the reach and efficiency of stablecoin usage.
Current Existing Stablecoins
Currently, stablecoins can be broadly categorized into three distinct groups: those backed by fiat currencies, others backed by cryptocurrencies, and those that rely on algorithms to uphold price stability. The primary distinctions among these categories stem from the underlying backup that determines their value, the collateral necessary for their issuance, their methods of issuance, and the strategies employed to maintain their price stability.
These promote an unprecedented level of transparency and resistance to censorship, upholding the principles of privacy and the core values of decentralization.
Users must place their trust in the stablecoin issuer. Such stablecoins are subject to potential blacklisting and may have less transparent backing structures.
These rely heavily on algorithmic formulas to regulate supply and demand, seeking to maintain stability in fluctuating markets.
USH is the first decentralized, multi-collateral stablecoin natively minted on the MultiversX blockchain. It can be minted through multiple facilitators, such as the Lending Protocol, using blue-chip assets like WETH, WBTC, USDC, USDT, UTK, MEX, or HTM. Additionally, USH can be minted at 0% interest through the Isolated Pools Facilitator, using assets such as EGLD or wTAO.
USH is minted by users who provide collateral at a predetermined ratio. This ensures the stability and value of USH, which is backed by a diverse basket of solid assets. When users either liquidate or repay their borrowed positions, the corresponding USH is returned to the platform and effectively "burned," or removed from circulation. This mechanism helps maintain the stablecoin’s parity with the U.S. Dollar.
Benefits of Decentralized Stablecoins
Transparency
Decentralized, over-collateralized stablecoins offer a transparent ecosystem where all financial operations and collateral statuses are openly recorded on the blockchain. This system allows users and auditors unlimited access to validate the health and fairness of the stablecoin, promoting an environment of trust and security.
Stability
By providing collateral that exceeds the value of the stablecoin in circulation, Hatom ensures that the coin's value remains stable against its peg, despite market fluctuations. This over-collateralization acts as a safeguard, providing users with confidence in the stablecoin's purchasing power.
Censorship Resistance
Leveraging decentralized technology, these stablecoins operate beyond the reach of centralized authorities, offering a financial instrument that is resistant to censorship. This ensures that transactions and participations are uninhibited by geopolitical and institutional constraints, affording users global access and financial sovereignty.
USH is purposefully designed without a centralized locus of control. The governance of USH is vested in the hands of the Hatom Protocol Community through Governance. This arrangement ensures higher transparency for USH compared to other market counterparts. Any updates or modifications to the protocol, including changes in interest rates or risk parameters, are made public. These changes require prior consensus from Governance before implementation, ensuring a democratic and transparent process.
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