AgeUSD, a brand new algorithmic stablecoin, will become the first stablecoin to launch on the Cardano network.

AgeUSD, a new type of algorithmic stablecoin, will launch on the Cardano (ADA) network. Its native token, ADA, is now the seventh-largest cryptocurrency by market capitalization. The launch will be the first time a stablecoin launches on the top-blockchain network.

The stablecoin is the result of a collaboration between Input-Output Global, Cardano’s parent company, blockchain-solutions provider Emurgo, and the Ergo Foundation, the stabelcoin’s principle developers.

The news comes as demand for cryptocurrencies soars as the flagship cryptocurrency, bitcoin (BTC), continues to set new all time highs.

Accordingly, this demand is apparently triggering a surge in the value of stablecoins in circulation, since they dominate cryptocurrency trading pairs.

The most popular stablecoin is tether (USDT). It has seen the value of USDT in circulation more than double to $47.2 billion year to date. According to data from CryptoSlate, there are now over 30 different stablecoin options available in the market.

With the influx of stablecoin options comes the development of innovative solutions to the underlying mechanism maintaining their stability. AgeUSD is part of a new class of stablecoin using algorithms rather than collateral to maintain value.

In stablecoins like USDT, the value of each USDT is assured by an equal value of USD being pegged to it. To reduce the reliance on centralized stores of value like fiat currencies, some stablecoins are pegged to baskets of other cryptocurrencies. The quantity of each cryptocurrency in the basket is determined by smart contracts executing trades on the open market.

These include stablecoins such as DAI and FLOAT. However, the ability to maintain value can be impacted by significant swings in the value of this collateral. Indeed, DAI has seen several “Black Thursday” events, due to market swings affecting the value of the stabelcoin’s collateral.

AgeUSD proposes a rules-based approach to value determination in an effort to reduce its exposure to the cryptocurrency market’s volatility. According to Emurgo, its goal is to “automate as much as possible within the mathematics of the protocol itself, rather than relying on dynamic transaction postings that can break down in a blockchain overload.”

In February, Cardano introduced the ability for users to create and transact in their own native tokens on its main chain.

The transformation into a multi-asset blockchain is one of the ways Cardano is attempting to differentiate itself from other blockchain platforms such as Ethereum (ETH) and Polkadot (DOT).

Moreover, the transition is part of Cardano’s roadmap to Voltaire. The platform upgrade will be “the final pieces required for the Cardano network to become a self-sustaining system.”

The post Cardano Sees First-Ever Stablecoin Launched on Network appeared first on BeInCrypto.

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