Stablecoin Importance

The stablecoin market is one of the biggest in the decentralized space, representing a possible trillion-dollar opportunity for all products that will find a market fit. Moreover, every ecosystem needs a safe and reliable decentralized base money asset to meet market demand.

Problem

In the MultiversX ecosystem, there is a shortage of stablecoins, with only a small market cap for those available. All of these stablecoins can be brought into the ecosystem only through the Bridge, which has multiple limitations and caps and which might not be suitable for everyone; this indicates a gap in the market and Hatom Protocol has the opportunity to innovate and better meet the diverse needs of DeFi users, thereby expanding the reach and efficiency of stablecoins' usability.

There are unmistakable indicators of the ecosystem's need for a native stablecoin, as evidenced by the demand observed through the Lending Protocol. During certain periods, the utilization rate has exceeded 90%, leading to borrowers paying exceedingly high interest rates. Such a scenario is unsustainable for the long-term health of the ecosystem.

Solution

A decentralized and over-collateralized stablecoin, backed by multiple strong assets, censorship-resistant, and also with the unique capability to offer a high and stable real yield through innovative avenues such as Liquid Staking, Lending Protocol, or Boosted Vaults.

The infrastructure of Hatom's Lending Protocol is already designed to support the essential features needed for a stablecoin and upon launch, Hatom is set to introduce three facilitators for its stablecoin: the Hatom Lending Protocol as the primary facilitator, Isolated Pools with zero minting fees for EGLD and dynamic minting fees for sEGLD, and the Boosted Vaults facilitator, which is aimed at significantly enhancing the liquidity of the stablecoin within the ecosystem.

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.

Yield Generation: sUSH introduces a competitive and stable yield opportunity through its interest-bearing model. This feature enables holders to generate earnings on their stablecoin holdings, enhancing the value proposition of sUSH within the DeFi landscape by providing a mechanism for passive income generation alongside asset stability.

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.

Decentralized Stablecoins	Centralized Stablecoins	Algorithmic Stablecoins
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 purposefully designed without a centralized locus of control. The governance of USH is vested in the hands of the Hatom Protocol Community and Hatom Governance. This arrangement ensures a higher degree of 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 Hatom Governance before implementation, ensuring a democratic and transparent process.