On 11/17/2022, the Aptos blockchain platform managed to launch its decentralized stablecoin, pegged to US$, ArgoUSD (USDA). This stablecoin is backed by highly liquid assets similar to the network’s native APT token, stored in the Argo lending protocol on the Aptos platform. As of this morning, a total of 8509.11 USDA has been issued. The total price of the tokens that are locked up is 129,605.47.
General information about USDA stablecoin
USDA is issued at the moment when the client opens the vault and takes a loan, after that, the coin is credited to the user's crypto wallet. Further, depending on the type of profitable asset, Argo will charge an interest rate on the loan. Once the USDA debt is repaid, the original borrowing amount is burned off and the interest that has been accrued is sent to the protocol treasury.
Although the USDA stablecoin is pegged to the US dollar, it can be traded on the secondary markets without being pegged. There are 3 arbitrage scenarios:
- If the USDA price is more than one US dollar, then people who have USDA debt can purchase it at a discounted price, and repay their Argo loan at a much lower price. This acquisition will help to increase the value of this coin;
- If the price of USDA is less than one dollar, then users can borrow USDA on Argo and sell it for other stablecoins, making a profit. This situation will help to lower the USDA price;
- If the USDA price differs in different markets, users will have the opportunity to buy it cheaper and sell it higher. This situation will help to balance the peg between the markets.
Aptos developers plan to work with major AMM and DEX exchanges to list stablecoin in pairs with other stablecoins and cryptocurrency assets.
A little earlier, the Circle organization spoke about the launch of the Transfer Protocol cross-chain and the expansion of support for a stablecoin, pegged to the euro, EUROC. The developers plan to implement this in the 1st half of 2023.
