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Tether, the largest stablecoin issuer, has officially unveiled Alloy by Tether, a pioneering asset class secured by Tether Gold.
Tether disclosed this development in an official press statement today. It noted that Alloy by Tether seeks to elevate stability within the digital economy by merging the consistency of a stable currency with the dependability of gold.
Alloy by Tether
Notably, Alloy by Tether marks the start of a new class of digital assets known as tethered assets. These assets are engineered to mirror the value of reference assets using stabilization mechanisms such as over-collateralization with liquid assets and the use of secondary market liquidity pools.
According to the report, the approach ensures a steady value correlation between the reference asset and its tethered equivalent.
At the launch period, the inaugural token in the Alloy by Tether series is aUSD₮, a digital token pegged to the USD dollar. Tether claims aUSD₮ stands out due to its over-collateralization with Tether Gold (XAU₮), backed by tangible gold reserves in Switzerland.
How to Get aUSD₮
Notably, users can generate aUSD₮ tokens by using XAU₮ as collateral. Per the report, the combination is particularly beneficial for users seeking to participate in digital transactions such as payments and remittances with a currency as familiar as the USD without liquidating their XAU₮ holdings.
At present, Alloy by Tether’s smart contracts are operational on the Ethereum Mainnet. Accordingly, users can generate aUSD₮ by depositing XAU₮ as collateral through a process supervised by Ethereum smart contracts.
Tether stressed that aUSD₮ smart contracts provide transparency by continuously monitoring collateral and minted tokens with the help of Price Oracles to maintain an optimal mint-to-value ratio.
Paolo Ardoino, CEO of Tether, conveyed enthusiasm about the launch of Alloy by Tether, stressing that it represents a significant milestone. He noted that aUSD₮ stabilization mechanism differs from standard options like USD₮.
Additionally, Ardoino revealed plans to integrate the technology into Tether’s forthcoming digital asset tokenization platform.
aUSDT, the first Tethered asset, just launched!
aUSDT is a synthetic dollar over-collateralised by XAUt (Tether Gold).Alloy by Tether is an open platform that allows to create collateralised synthetic digital assets and will soon be part of the new @Tether_to digital assets… https://t.co/J8JyWt9duh
— Paolo Ardoino 🤖🍐 (@paoloardoino) June 17, 2024
Notably, Alloy by Tether is also a public platform facilitating the creation of various tethered assets with diverse backing strategies. The announcement noted that this technology provides a contemporary approach to asset management.
Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V. will oversee the issuance and management of Alloy by Tether. Both entities have authorization from the CNAD in El Salvador to cater to various customer needs and regulatory frameworks.