09 Sep WUSD: DeFi’s Next-Generation Stablecoin
Many of Wault Finance’s innovative products have made it a leader in the DeFi space. With a wide range of farming and stake opportunities, this protocol is one of the fastest-growing projects in the DeFi sector. Commerce backed Stablecoin News
Currently, Wault is working on developing its stablecoin WUSD, which will allow it to expand its ecosystem. As a next-generation stablecoin, WUSD makes use of cutting-edge technology that guarantees that it will always be pegged to the dollar, and is designed to provide use-cases for its holders. An overview of stablecoin’s features will be presented in this article.
As a fiat-backed or algorithmic stablecoin, WUSD is unique. Within a sustainable mechanism, WUSD is backed by crypto assets.
Stablecoin backed by commerce
The stablecoin is backed by USDT and WEX, the native token of Wault Finance. There are USDT deposits for 90% and WEX for the remaining 10% of WUSD. Thereby, stablecoin holders will not lose more than 10% of their capital in the worst-case scenario.
WUSD’s process is outlined below. For example, a trader deposits 1000 USDT to purchase WUSD, and the smart contract deposits the first 900 USDT to WUSD’s Treasury, while keeping the remaining 100 USDT for themselves is the currency used to purchase WEX tokens on the exchange.
They’re held in the Treasury, and a portion of that is used to generate yields to reinforce the Treasury. As a result, the WUSD will always be backed by enough collateral, while also earning yields to strengthen the Treasury. WEX’s price rises as a result of the buybacks and lockups, creating a positive feedback loop for the ecosystem.
A user wants to exchange 1000 WUSD for USDT, so the WUSD is burned from circulation. The user gets back 1000 USDT with 100 of it bought back from WEX at the market price. Along with the following stability mechanisms, this Treasury ensures the USD peg of WUSD and prevents risks associated with internal minting and burning of a governance token
Indicators of USD Stability
Wault has also implemented four different stability mechanisms to ensure that the WUSD will remain pegged to the U.S. dollar. The Treasury, WSwap Emissions Support, WSwap Trading Fees Support, and WUSD Staking Support are all part of this.
Additionally, the additional stability mechanisms reinforce the WUSD Treasury and ensure collateralization. Trades on the BSC and polygon DEXs like WSWAP contribute 15% to the treasury.
The Treasury receives a portion of WEX emissions when WUSD moves off-peg, allowing arb bots to return WUSD to peg if the Treasury is full.
In addition, WUSD staking is one of the main ways that Wault intends to keep the stablecoin pegged. With WEX emissions, Wault hopes to entice early WUSD holders. For the WUSD peg, the emission rate will act as a stabilising mechanism. WUSD staking incentives will be modulated if the peg shifts from $1. This is a high yield for stablecoins in DeFi. Since its recent launch, the WUSD-BUSD pool has amassed more than $40 million TVL.With the help of its ecosystem of partners, Wault is also working on new partnerships to establish additional stablecoin pools and use-cases. Commerce backed Stablecoin News
What’s to come
Wault has been able to establish itself as one of the leading DEXs on two different blockchains. In 2014, Wault reached a value of over $1.5 billion in TVL during the crypto bull run. It’s also worth noting that in recent months, the project’s team has made significant strides with regards to the timely release of products.
According to Wault, the company intends to continue building integrations in order to expand to other blockchains in the near future. Des plans exist for a lending platform to expand DeFi’s current products on its protocol. Wault is also hard at work supporting the ecosystem.
In addition to the Moon Fuel Grant Program, Wault has also launched a Scholarship Program to help low-income gamers earn a living through play-to-earn games.
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