- Agora CEO Nick van Eck argues that yield-bearing stablecoins are neither stablecoins nor cash.
- Van Eck factors out the challenges of yield-bearing stablecoins and introduces AUSD as an answer.
- The CEO praised Agora’s AUSD as a stablecoin 3.0 that would strengthen your entire business.
Nick van Eck, CEO of stablecoin issuer Agora, lately shared his ideas on “yielding stablecoins,” stating that they’re “neither cash nor stablecoins.” Extra particularly, van Eck argued that stablecoin issuers that provide passive revenue to holders are straying from the core mission of stablecoins.
Elaborating on the problem, van Eck seemed on the evolution of stablecoins from Stablecoin 1.0 to Stablecoin 2.0. He famous that Bitfinex and Tether have been the primary to introduce centralized digital {dollars}. USDT is without doubt one of the finest examples of Stablecoin 1.0, however Tether's progress was adopted by many different stablecoins.
Van Eck outlined traits that disqualify yield-bearing stablecoins from being thought of stablecoins or currencies, highlighting two main points: low utility and acceptance, and restricted room for growth. Van Eck argued that liquidity points are a standard drawback within the yield-bearing stablecoin market.
Many nations, together with the U.S., contemplate yield-bearing stablecoins to be securities, limiting their attain to prospects. Agora’s CEO burdened that stablecoins will not be “freely tradable,” putting constraints on “liquidity suppliers, distributors, and better utility caps.”
Moreover, Van Eck defined that yield-bearing stablecoins are complementary to AUSD, USDC, and USDT. Describing Agora’s AUSD stablecoin as “the subsequent era of stablecoins,” or just Stablecoin 3.0, Van Eck stated:
“We designed AUSD’s mannequin to be the most effective stablecoin for your enterprise. We pay corporations based mostly on the companies they supply, which may embrace itemizing their token, offering liquidity, advertising and marketing, and accepting AUSD as fee or collateral on our platform.”
Moreover, Van Eck introduced the launch of AUSD on the Ethereum mainnet in June, including that the usage of AUSD might strengthen your entire cryptocurrency business.
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