Following rapid growth in the DeFi space and a steady increase in the value of assets being secured on DeFi platforms, the need for reliable Stablecoins to help balance and maintain the health of a platform is more important than ever. Currently, e-Money, provides a range of currency-backed interest bearing Stablecoins that provide near-zero fees, immediate settlements, and instant finality, alongside higher transparency, accessibility and equity.
Traditional Stablecoin markets comprise collateralized Stablecoins, which
Are backed by real-world assets, and algorithmic Stablecoins that aren’t. Both types of Stablecoins mean to maintain a 1:1 peg into a FIAT money such as USD or EUR. However, they face issues when it comes to maintaining a reliable peg.
Algorithmic Stablecoins can battle with over-collateralisation and can lack the necessary purchasing power to maintain a peg when the market turns sour. They also rely heavily on platform use and smart-contract interaction for immediate liquidity, alongside trade fees to maintain a peg. This can leave users possibly exposed to unnecessary risk and uncertainty.
Collateralized Stablecoins such as USDT are backed with a FIAT reserve, which helps maintain a 1:1 peg as assets can be minted and brought back from the reserve. These also face problems, as it relies on a “centralised” reserve of assets to maintain a peg, which means abrupt regulatory oversight or modifications can radically affect the peg. This can affect relationships with banking partners and place stress on the equilibrium of a Stablecoin. Additionally, as inflation and instability in traditional markets persist, this can affect how Stablecoins operate in a negative rate of interest environment.In the DeFi space, reliable pegs are imperative for ensuring that DeFi platforms increase yields and incentives for consumers. Collateralized Stablecoins would be the most-used option due to their reliable peg and market-wide use, together with algorithmic Stablecoins used directly across DeFi. It’s therefore critical for Stablecoins to get immediate liquidity and reliability across leading DeFi platforms as they’re significantly traded and used regularly for liquidity pools and DEX services.
Currency-backed Stablecoins from e-Money are now looking to supply a better alternative to present Stablecoin markets. They are fully endorsed by bank deposits and government bonds, multi-currency, interest-bearing
And audited to demonstrate proof of funds. E-Money assets will be used for payments, remittances, speedy money allocation and distribution through the community, and also for payment of any or all transaction charges.
Because these Stablecoins are backed by real, tangible assets in European monies, this further ensures a reliable peg together with the underlying asset and makes e-Money assets fully collateralized and compliant with all regulatory entities. Additionally, as accrued interest is earned on holdings, they become more resilient to changes in the economic climate, even while offering benefits to owners of these fiat-backed tokens with positive interest.
The e-Money system is developed on the Cosmos system, which is a Proof-Of-Stake system that provides consumers with immediate finality on trades, increased scalability and immediate payment processing. Additionally, the network enables e-Money to connect to additional services from the Cosmos ecosystem, which can use the currency-backed Stablecoins as a means of payment. It’s intended to fulfill the demands of consumers who are accustomed to card and mobile-based obligations systems. Because of this, the service needs to be simple to use, fast, and with negligible fees. The network can be multi-chain, together with cross-chain bridges to ETH, Avalanche and a host of other networks currently in development.
NGM is a staking and rewards token that assists customers secure the e-Money system and confirm blocks and trades, all whilst earning interest on their staked assets. Operations will be solely financed by NGM token benefits, entirely aligning the interests of e-Money and NGM token stakers.
E-Money also includes a functioning decentralized exchange, which fosters the utility of e-Money tokens and incentivises the use of e-Money assets across the Cosmos infrastructure. The DEX is currently acquiring the necessary liquidity to manage predicted need.
But as DeFi platforms continue to grow and much more value and assets are secured, it is clear to see that e-Money is on track to becoming a leading Stablecoin provider within the DeFi space. As the entire Cryptocurrency industry develops further, more reliable Stablecoins such as e-Money will be necessary to help secure platforms, ensure liquidity stays stable and preserve long-term sustainability.
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