What is Tether's New Platform Called Alloy?

Tether, known for its prominent stablecoin USDT, has unveiled a new platform called Alloy. This platform introduces an over-collateralized asset backed by Tether Gold (XAUT).

Tether claims that Alloy will be an open platform, allowing the creation of assets backed by various other assets, including yield-bearing products. This flexibility could reportedly open new avenues for digital asset creation and management, providing users with diverse investment opportunities.

Alloy: A New Asset Class

Alloy is a smart contract-issued asset that is over-collateralized and backed by Tether Gold. The platform aims to combine the stability of the US dollar with the security of gold. This dual backing offers a reliable digital currency for payments, remittances, and asset management.

To mint Alloy tokens, users must deposit Tether Gold as collateral. The smart contract ensures that the value of Alloy tokens minted does not exceed 75% of the collateral's value. If this threshold is breached, the smart contract automatically liquidates the position to maintain stability.

Tether Gold: The Backbone of Alloy

Tether Gold (XAUT) is a gold-backed asset issued by Tether, pegged to the value of gold and backed by physical gold stored in Switzerland. XAUT has a market capitalization of $570 million. It offers a secure way to hold gold digitally, combining the traditional value of gold with the convenience of cryptocurrency.

aUSDT: The First Asset on Alloy

The first asset available on the Alloy platform is aUSDT, pegged to the US dollar. Investors can mint aUSDT by depositing XAUT as collateral. This process allows users to leverage their gold holdings without selling them.

aUSDT is designed for those who want to use cryptocurrency for payments and remittances while retaining their gold-backed tokens.

The asset issuance on Alloy is managed by Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V. These entities are regulated under El Salvador's National Commission of Digital Assets (CNAD), ensuring compliance and security in the issuance process.