Stablecoins have proven to be an exciting addition to the cryptocurrency space. There are several of these currencies on the market today, but there’s always room for competition. Orion Protocol’s USDo stablecoin will change the landscape once again.
What Is USDo About?
Some people may argue the industry doesn’t need another stablecoin, as there are already a dozen options to choose from. However, USD-pegged blockchain-based assets have indeed gained a lot of momentum over the years. It makes one wonder if there is even a need for more of these currencies, yet the Orion Protocol team seems to think so. Furthermore, it brings more utility to the native ORN token, as USDo is minted by staking the native asset.
After launching the pre-staking solution via Orion Pool, Orion Protocol managed to have 10 million ORN locked in staking, which equals 35% of the circulating supply. Users can earn rewards through single-asset staking or providing multi-asset liquidity. Adding a new option for all users is beneficial, as the USDo stablecoin will have use cases within the Orion Terminal ecosystem. Moreover, it will become a primary base trading token pair on the Terminal itself.
To mint USDo, users will need to put up collateral in the form of ORN. The Orion Oracle will constantly monitor the collateral and adjust the requirements where necessary. Moreover, the users who pursue this option will be able to “rebase” their position if the staked collateralized ORN rises in value. Through the rebase, suers can mint additional USDo, but it will also raise the strike price for liquidation.
Additionally, if the ORN price would decrease over time, users can increase their exposure by staking more ORN and avoid liquidation. Failing to do so will liquidate one’s staked ORN to protect the value of USDo and ensure it can maintain its peg to the US Dollar. Having this transparent system in place ensures there can be no confusion among users who participate in the minting of this new stablecoin.
More Stablecoins Are A Good Thing
The cryptocurrency industry can benefit from some healthy competition in the stablecoin field. Removing the need for centralized entities and issuers of these pegged assets will drive the cryptocurrency industry in a new direction. There is no need for fiat currency reserves and bank accounts in this space, yet most of the current stablecoins require it either way.
Having a new asset backed entirely by an existing cryptocurrency rather than fiat currency is an intriguing option. It does not require access to banks or other financial institutions, as the ORN token is in the hands of many users today. Leveraging this token to generate a new asset that maintains a peg to the US dollar can give it tremendous potential, assuming other service providers in the industry will recognize USDo.
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