As a seasoned crypto investor with a knack for spotting promising projects and understanding their underlying mechanics, I find the Elixir Network’s introduction of deUSD stablecoin quite intriguing. The decentralized nature of this synthetic asset, coupled with its innovative use of collateral to capture funding via shorting perps, seems like a game-changer in the DeFi ecosystem.
The Elixir network has launched deUSD stablecoin, a decentralized asset that aims to change the DeFi ecosystem. The team asserted a $1 billion liquidity for the new asset outlining its ecosystem and operations. Crypto users look forward to yield-earning projects while providing liquidity.
Elixir Announces deUSD
Elixir Network introduced its stablecoin, dubbed deUSD, which is a decentralized synthetic asset. As stated in the announcement, deUSD will be generated by staking stETH and sDAI, with the deposited collateral used to borrow ETH. This setup establishes a neutral delta position through short perpetual contracts (perps), thereby minimizing risks.
“The Elixir Network secures its operations using stETH and sDAI as collateral. This network borrows funds through shorting perpetual contracts to raise capital, all the while minimizing the risks associated with these loans. In favorable funding conditions, deUSD takes on long-term exposure, while in unfavorable situations, it increases its exposure to T-Bills.”
The funding rate basis trades on Ethereum is positive and in case of negative funding, it can be resilient. This integration into the ecosystem acts as the preferred liquidity collateral across centralized and decentralized exchanges.
“The majority of decentralized exchanges (DEX) that are integrated with Elixir will accept deUSD as collateral in their trading platforms, which may increase both Open Interest and Total Value Locked (TVL). In addition, directing deUSD towards native exchange integrations backed by Elixir can enhance returns. This action could attract more liquidity to the partnered exchanges.”
The company announced that they hold a $1 billion reserve for their stablecoin, backed by Decentralized Finance (DeFi) initiatives, notably the Apothecary program. This program currently secures a total of $300 million in assets for various projects.
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Platform Focuses on Decentralization
As a researcher, I’m excited to share that Elixir considers deUSD as a decentralized synthetic asset in numerous aspects, including execution and verifiable proofs, among others. Notably, this stablecoin is seamlessly integrated with on-chain, non-custodial liquidity, eliminating the need for centralized entities. This attribute makes deUSD an attractive choice for collateral within Elixir, potentially increasing its widespread adoption. The response from crypto users has been overwhelmingly positive across various industry sectors, highlighting recent growth within the ecosystem.
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2024-07-31 19:40