USDV wants to be native on more chains than other stablecoins

[Emily]

USDV wants to be native on more chains than other stablecoins


Below is a guest post by Christina Comben.

Slightly above current market value 20 million dollarsyou’d be forgiven for not hearing Verified US Dollar (USDV). The newcomer to the stablecoin market had a soft launch on ethereum in November 2023 and is steadily expanding its native omnichain capabilities to other ecosystems.

USDV is currently live on eight EVM-enabled chains, including arbitrum, BNB chain, optimism, and Avalanche. Cryptoslate spoke with Mathew Commons, President of the Verified USD Foundation and former algorand CFO, to find out why the industry needs another stablecoin and what makes USDV different.

Adapting to Web3’s ‘decentralized ethos’


The concept of the Verified USD Foundation emerged from two organizations: Canada-based interoperability protocol LayerZero And Matrix portA crypto financial services company based in Singapore. Commons explains,

“They were looking at what the future needs for stablecoins were and wanted to take a new technical approach to align stablecoins with the decentralized ethos of our ecosystem while still having a fully reserved stablecoin.”

USDV’s governance structure differs from legacy stablecoins, which are mostly private assets at risk of centralization, although Commons acknowledged that it “played a pivotal role in getting us to where we are today.” USDV was established as a foundation.

“We aim to be significantly more decentralized and have community participation,” he says.

USDV uses an attribution mechanism called Color Tracking, This allows it to track which partners are bringing new capital into the USDV system so returns can be shared.

“Yield is not shared with the end user,” he says, “as this would make it a security and problematic as a permissionless token, but unlike older stablecoins that keep the yield to themselves, we provide a strong incentive for our partners to capitalize on new users and capital into the system.” “It will win.”

The Verified USD Foundation does not mint the new USDV itself, but provides the legal, technical and governance framework for its partners (DeFi protocols, centralized exchanges, OTC providers) to mint it. When a partner creates USDV, they receive the permissionless security token STBT (short-term treasury bill token), which is locked into the smart contract to create new USDV and allows it to earn returns by being minted in the partner’s color.

“If they created it, they will continue to get returns no matter what chain it goes to,” he confirms.

Completely transparent with on-chain collateral


USDV is a reserve-backed stablecoin. “We are entirely backed by short-term treasury bills with maturities of three months or less and aim for best-in-class transparency. All our guarantees are on chain.” USDV’s separate collateral token, STBT, is issued by an on-chain subsidiary of Matrixport. One dollar STBT is locked into a smart contract on the Ethereum mainnet to mint one dollar USDV.

“There is transparency across all chains so users can always see that one dollar of USDV is fully backed by collateral.”

Unlike other stablecoins that publish weekly or monthly audit reports, USDV works with Chainlink to provide ‘Proof of Reserve’ that shows its audit in real-time.

“So every day they verify the transparency of the collateral.”

Built with LayerZero’s omnichain fungible token standard


USDV has native omnichain capabilities; This means that although all USDV is created on Ethereum, it can be burned and recreated on any chain, many of which are connected to over 70 different blockchains: “significantly more than any of the older stablecoins,” Commons notes.

USDV aims to be the stablecoin found on the largest number of chains, starting with EVM-enabled chains.

“But we expect to see additional chains, some of the leading non-EVM chains, even Bitcoin Layer 2s. “We want to be native to more chains than other stablecoins.” He continues: “If you look at some of the larger non-EVM chains, that’s where the action is right now. We think this will be a big trend next year and we definitely want to be there.”

Is the war of stablecoins coming?


Commons doesn’t view USDV as a company fighting for a slice of the pie in an already crowded field. On the contrary, he believes that the size of the cake will increase so that everyone can eat it.

“Looking ahead, some analysts are even predicting 30x growth in the stablecoin market in the next five to seven years. I don’t think it’s about challenging existing chains head-on and growing at the expense of others. “The market will continue to grow rapidly and we have a competitive advantage in many areas.”

Anything related to Commons as the Verified USD Foundation grows?

“I think the challenge for everyone is that regulations are in flux… Maybe we could see a stablecoin bill. “It would be positive for the industry to have regulatory clarity.” His team “remains on top of the regulatory environment” and is witnessing the fastest growth outside the US, particularly in emerging markets. “It could be high-inflation economies like Argentina or Turkey, or emerging economies that want faster and lower cost in foreign exchange. It’s great to see crypto solving real-world use cases rather than just increasing numbers,” he says.

Beyond local chain functionality, USDV’s main growth strategy is to find good local partners.

“Much more than other stablecoins because our business model is based on partnerships. So we look for the best OTC desks and the best community influencers that we can work with, and through our unique way of sharing underlying collateral return, we actually partner with them. “This is not just a one-time partnership; we are in a long-term partnership.”

What’s next on the horizon for USDV? Commons says USDV is entering its next phase and has a lot of plans, including growing the team, finding more partnerships, and coming up with “really exciting end-user initiatives towards the end of the year.” Watch this space.

#USDV #native #chains #stablecoins