Sora Introduces Stablecoin XSTUSD
Sora XSTUSD is a Stablecoin on SORA for Polkadot Ecosystem Public Testing.
What is XST?
Fisher’s Compensated Dollar
XOR SynThetics, hereafter, XST, are synthetic assets pegged to an index of value and backed by XOR.
Stablecoins and Synthetic Assets Today
Currently, there are 5 different types of stablecoins/pegged assets:
— Fiat-Backed Stablecoins (or Tokenized Fiat): These stablecoins are backed by and pegged to dollars (or other fiat currency), their value remains tied to the price of the pegged currency. For example, USDC.
— Crypto-Backed Stablecoins (or On-Chain Collateralized Stablecoins): These are backed by other crypto assets. For example DAI.
— Precious Metal-Backed Stablecoins (or Off-Chain Collateralized Stablecoins): Like gold-standard fiat, these stablecoins use gold and other metals to back their value. For example Tether Gold.
— Algorithmic Stablecoins: These stablecoins use algorithms to back their value, there are some variants that can be pegged to fiat values, depending on the algorithm used. For example AMPL.
— Synthetic assets are tokens with value pegged to an oraclized asset. Purely synthetic assets can be used to represent many types of value, such as, to track the shares of financial instruments and securities. For example, SYNTHETIX.
XST is an algorithmic stablecoin for the SORA ecosystem, initially proposed in 2018, based on the ideas of Irving Fisher’s compensated dollar. However, instead of being backed by gold, XST assets are backed by XOR.
What Makes SORA XST Different?
Now that stablecoins and synthetic assets have been defined and classified, you might be wondering what makes XST stand out from the rest?
XST helps to solve the problem of XOR liquidity by creating synthetic assets backed by a variable amount of XOR and pegged to a target index (e.g., a currency). XOR is minted/deminted to always guarantee the value of the pegged index. The first index implemented is linked to the value of DAI and will be called XSTUSD.
About SORA
SORA is a new economic system aimed at creating a supranational multiverse economic system with built-in tools for decentralized finance (DeFi). The SORA network implements a new way of parachain architecture on Polkadot and Kusama network, with the capability to bridge external blockchains (like Ethereum) to the Polkadot ecosystem.
About Polkaswap
Polkaswap is a non-custodial liquidity aggregating, cross-chain AMM DEX designed uniquely for the Polkadot ecosystem with boundless liquidity through its one-of-a-kind Aggregate Liquidity Technology (ALT).
About Fearless Wallet
Fearless Wallet is a mobile wallet designed for the decentralized future on the Kusama and Polkadot ecosystem, with support for iOS and Android platforms. An awesome user experience, fast performance, and secure storage for your accounts. Fearless Wallet will integrate Polkaswap for easy, decentralized swaps of assets.
