How CUSD can empower a future of cross-chain liquidity: A Recap
Key takeaways:
Meet the new CUSD: A more stable, regulatory-compliant and transparent mechanism
Stably has joined hands with Ninety Eight to deploy a trustworthy, transparent USD-backed stablecoin, Mr. Kory Hoang, CEO of Stably explained the key improvements of the CUSD mechanism. Every CUSD is backed 1:1 with US dollar by a pool of highly liquid US dollar assets, including bank deposits, money market instruments, and the USDC stablecoin itself.
The highlight of this mechanism is the solid legal framework around the management of collateral assets. Given that these assets are separately placed in a statutory trust away from the operating funds of Stably and Ninety Eight, they are remotely protected against any bankruptcy event that might happen to the two entities. Moreover, the issuer of CUSD - Stably, is registered as a money service business (MSB) in the United States, which enables them to compliantly issue and redeem convertible virtual currencies such as stablecoins. Therefore, CUSD issuance is conducted in a regulatory-compliant manner.
To uphold trust and transparency in CUSD, Stably also works with an independent third party named The Network Firm periodically to attest that the total circulating CUSD is backed 1:1 with the collateral reserve. Furthermore, the statements of the accounts holding the collateral assets are published monthly to ensure with holders about the stability of CUSD. This encourages market arbitrage to confidently step in to restore the peg of $1 when the stablecoin is trading below or above $1, as they will be fully aware of verifiable collaterals backing CUSD. Mr Kory continued, that in the future, Stably is looking into including additional collaterals such as on-chain tokenized Treasury tokens like T bill tokens for a more permissionless distribution mechanism.
CUSD as a liquidity layer to foster more seamless DeFi experiences on Viction
" CUSD on Viction introduces the first experience that is not available anywhere else or with other stablecoins yet is that this is the first time you can use and transfer and swap and do whatever you want with CUSD without any VIC for gas fee "- Said by Mr. Thanh.
He further went on to explain the token standard VRC25 of CUSD, which allows Ninety Eight and Stably to sponsor the gas fee for users and highlighted more seamless DeFi experiences on Viction especially for Web3 newcomers. In Mr. Thanh's belief, given this is the first time users can use stablecoin without the native asset of the chain, it would be a similar experience when using a payment app or digital money service in daily life. Thus, CUSD can fittingly be introduced to lots of users when crypto industries are publicly recognized and adopted. He added that with the rise of regulatory frameworks and crypto getting more adoption nowadays, CUSD can hold more utilities in the real world, such as payment for restaurants or shops in Southeast Asia. But for the short-run, CUSD will play as a liquidity layer to enable more primitives and ideas as well as opportunities for builders to build on Viction first.
Another approach to CUSD's role in the Viction ecosystem can be explored via the fiat onramp feature provided by Stably. As indicated by Mr Kory, through the fiat onramp and offramp function, users will be able to effortlessly onboard Viction from more than 150 countries all over the world by various payment methods, including bank transfer, credit or debit cards. This can contribute additional liquidity from the real world into Viction. Not only this, users can swap CUSD from other stablecoins such as USDT, and USDC on different layer-1 blockchains into CUSD on a 1:1 basis, thus enhancing interoperability between other ecosystems and the Viction ecosystem.
The mission to fulfill the untapped needs of emerging blockchains
CUSD is envisioned to be the stablecoin infrastructure for emerging blockchain ecosystems all over the world. As pointed out by Mr Kory, there exist over 200 blockchains but over 90% of them have not had native stablecoin infrastructure. Despite this, other well-known stablecoin issuers are mainly present on several largest blockchain networks. This market gap is where CUSD steps in to provide a native liquidity solution in the form of a stablecoin.
Similarly, Mr Thanh highlighted the crucial role of native stablecoins over the wrapped version and the increasing incidents of cross-chain bridges being hacked. Altogether, he concluded that CUSD represents promising opportunities to tackle the unfulfilled needs of these emerging blockchains, thus fostering liquidity for a cross-chain economy. In the near future, there awaits more activities and campaigns to encourage users to experience the new CUSD on Viction.
The AMA recording can be found via: https://twitter.com/i/spaces/1PlJQDgqzRyGE