blockworks.co
Agoric, a blockchain network built on Cosmos, aims to empower developers in building DeFi applications using JavaScript. As part of its continuing development, the network is launching a minting application built on top of the Inter Protocol called Vaults.
Inter Protocol is a decentralized application on Agoric. It is an application layer that is responsible for implementing the Inter Stable Token (IST), a native stablecoin on the Cosmos network.
Dean Tribble, CEO of Agoric, noted in a press release reviewed by Blockworks that Vaults will offer an alternative way to mint stablecoins “setting decentralized tokens apart from their fiat-backed equivalents.”
“Fully functioning Vault systems allows crypto collateral holders to leverage their assets and fulfill their demand for IST, which in turn contributes to the Agoric economy through fees,” Tribble said.
IST itself is similar to Maker DAO’s DAI — a decentralized stablecoin pegged to the US dollar.
Blockworks Research analyst David Rodriguez said IST has the opportunity to become a premier decentralized stablecoin in the Cosmos ecosystem.
“With the ability to mint IST using ATOM collateral, it reinforces the idea of ATOM as the reserve currency of the Interchain,” Rodriguez said.
Users can deposit price-stable assets such as USDC, USDT and DAI into Vaults and mint IST at a 1-to-1 ratio. Vaults will also enable ATOM token holders to mint the stablecoin.
These assets will be used as collateral for IST, and users will be able to reclaim their deposits at any time in exchange for their minted IST.
Vaults is currently overseen by a committee elected by the Agoric community. This committee is responsible for evaluating and approving new collateral and ensuring that IST remains pegged to the dollar.
On top of the committee, IST also has its own liquidation system and oracle build.
IST’s decentralized oracle network consists of five experienced chainlink node operators and is managed by Simply Staked. Liquidation is triggered when the Vault’s collateral-to-debt ratio dips below the protocol’s preset safeguard.
Zaki Manian, the director of the Decentralized Cooperation Foundation (DCF), said these new components will continue to improve the scalability of IST.
“The liquidation system and price oracle build on the foundations established with the Economic Committee and PSM operations,” Manian said.