AgeUSD, the stablecoin protocol based on the Ergo blockchain, has been announced by the Ergo Foundation, EMURGO, and IOHK. According to Roman Pellerin, IOHK’s CTO, once its smart contract feature is unlocked, the crypto-backed algorithmic stablecoin will also be accessible on Cardano.
A new type of stablecoin to be implemented on the Ergo blockchain
The launch of a new secure coin named AgeUSD was announced by EMURGO, a global blockchain corporation charged with designing applications for the Cardano blockchain. However, stablecoin will not be released on Cardano, but on Ergo, a decentralized network for blockchain.
The stablecoin will be based on a novel algorithmic architecture built on the Ergo blockchain, revealed during the ‘Ergo Summit 2021’ on Jan. 24. AgeUSD is the result of a joint venture between the Ergo Foundation, EMURGO, and the Cardano blockchain platform company, IOHK.
The fact that it is not a fiat-pegged token, but a crypto-backed algorithmic stablecoin protocol, is what makes AgeUSD distinct from other stablecoins on the market. This implies that AgeUSD does not depend on collateralized debt positions (CDPs), rendering liquidation events virtually impossible.
A large part of its mathematics can be seen as automated as possible by the protocol and avoid depending on complex posing of transactions. And although EMURGO noted that AgeUSD is still far from addressing all the problems faced by stablecoins, it represents a major effort to build a highly safe alternative to the current market offering.
The light of day on Cardano could also be seen by AgeUSD with Goguen
AgeUSD’s importance stretches well beyond only Ergo. Although the stablecoin in its protocol would use Ergo’s native cryptocurrency, the protocol may also be deployed to other blockchains. Given the strong relations between EMURGO and Ergo and IOHK, it was only evident that the ambitious stablecoin will be published on Cardano.
During the Ergo summit this weekend, Bruno Woltzenlogel Paleo, IOHK’s Technical Project Director, shared a preliminary, high-level implementation of AgeUSD in Plutus. He said during his presentation that IOHK wanted to show the new capabilities and features that open up when you combine the smart contract programming language of Cardano’s Plutus with Ergo’s ErgoScript.
IOHK’s CTO, Romain Pellerin, shared the AgeUSD news on his Twitter account, confirming the news that Cardano would receive the stablecoin. The announcement by Pellerin, however, was brief and had no mention of a clear timetable when AgeUSD will be rolled out on Cardano.
Given that the upcoming Goguen process of Cardano will fully activate the smart contract features of the blockchain, it is reasonable to assume that AgeUSD will roll out by the third quarter of the year, when IOHK predicts that Goguen will be absolutely complete.