Ordinals protocol introduces dollar-backed stablecoin on bitcoin blockchain – Cryptopolitan
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The launch of a BRC-20 stablecoin by US crypto company Stably recently sparked a contentious debate about ordinals among the bitcoin community. The controversial BRC-20 standard and Ordinals protocol allowed it to continue to leave a larger mark on the bitcoin ecosystem. The latest stablecoin is Stably USD, which claims to be the first BRC-20 stablecoin.
Being ERC-20 tokens, Tether (USDT) and USDCoin (USDC), two of the largest stablecoins, transact most of the volume on the Ethereum network. Nevertheless, both tokens are now available on several networks, including TRON, Solana, and Avalanche.
BRC-20s are quite similar to NFTs, just like ERC-20 tokens. They enable the inclusion of arbitrary, non-financial data into the bitcoin blockchain without requiring a sidechain or additional token. Within the bitcoin community, there has been much discussion about BRC-20 tokens, with influential people holding both pro and anti positions.
The BRC-20 US dollar-backed stablecoin was recently launched on Twitter by US-based Stably, which describes itself as a fiat ramp for cryptocurrency trading. However, there are certain warning signs.
The company’s website lists the entire offering as $69.420 trillion. That’s more than twice the US national debt and probably refers to meme culture. And things are moving slowly. Their supporting documents refer to a spare wallet in the amount of $220.
Although Stably says that Stably Trading LLC is a registered money transmitter, its website’s registration number and address do not match those found in the FinCEN database under “Stably Trading, LLC.”
The company tired that “#USD is backed and redeemable 1-to-1 for USD collateral managed by our regulated custodian” and added that a third-party firm will conduct monthly attestations to guarantee the collateral always matches what was issued.
Technically, StablyUSD is not a brand new stablecoin. It has been around since 2019. However, it was recently converted into a BRC-20 token on Bitcoin. The market cap across 11 distinct blockchains, including Ethereum, BNB Chain and Arbitrum, is $7 million, according to the latest attestation report.
According to the USDS listing on CoinGecko, the exchange rate peaked at $9.89 on November 30 before plunging to $0.05 on December 9 of the following year. On the decentralized market UniSwap, the token’s liquidity is split between two trading pairs for around $5,000.
The Stably USD reserves are held by Prime Trust, a regulated custodian bank, according to Stably’s website. However, it is more plausible that Prime Trust uses accounts at a small number of FDIC-insured banks rather than holding reserves directly, as stated on its website.
To counter this, Stably said it would impose a know-your-customer (KYC) and anti-money laundering (AML) process on anyone looking to exchange stablecoins for real dollars.
Despite Stably’s hasty claims to be the first USD stablecoin on the Bitcoin network, USDT was originally introduced on OMNI, a sidechain of the Bitcoin network, in 2014. The network supports several US dollar-backed stablecoins, including DoC on Rootstock.
However, the new stablecoin is the first to use the BRC-20 standard. It remains to be seen if the controversial Ordinals protocol will usher in a new era of stablecoins or if this is just another BRC-20 fad that will quickly fade away.
According to Michael Saylor, co-founder and executive chairman of MicroStrategy, the business is not only aware of Ordinals, but is also curious about how the protocol that gets the Bitcoin community buzzing can spur software innovation.
Launched in January, Ordinals are often used to build NFT-like assets on Bitcoin. Despite not being fully adopted by the Bitcoin community, the protocol has sparked a new round of experimentation with the oldest cryptocurrency.
An experimental framework for creating tokens on top of Bitcoin is a recent advance that uses Ordinals. In early March, the chain data enthusiast who goes by the name Domo invented it. Since then, thousands of additional “BRC-20 tokens” have been produced.
Depending on who you ask, all of these transactions are partly – or entirely – to blame for the increased transaction fees on Bitcoin. This has proven beneficial to Bitcoin miners, who receive transaction fees in exchange for helping to secure the network.
However, a large part of society has expressed dissatisfaction with the fact that high fees make it difficult for ordinary users of BTC to use it as the peer-to-peer electronic cash system envisioned by Satoshi Nakamoto, the Bitcoin creator who goes by the pseudonym .
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