Tether Introduces Gold-Backed US Dollar Stablecoin Called Alloy
Tether is launching a new stablecoin that will serve as a real-world asset token. The gold-backed stablecoin in question is pegged to USD. It is the first asset that is tethered as per the issuer.
Features of Alloy
The token is called Alloy (aUSDT) and it is minted on a new Alloy introduced by Tether. As per the firm, Alloy is overcollateralized with Tether Gold (XAUt).
XAUt is backed by real gold and allows investors to claim propriety of real gold. However, it is not backed by USD. Therefore, the token is a synthetic dollar. It is crafted to showcase the value and utility of USD without a direct peg.
Alloy management indicated that tethered products are tokens that will track the reference price of other digital assets based on a different stabilization infrastructure.
The platform further stated that Alloy will provide a chance to maintain gold exposure for long-term investors. At the same time, the investors are able to obtain a dollar-quoted tethered asset to make everyday transactions.
The firm noted that tethered assets and yield-bearing tokens can be minted on the platform. The synthetic dollar is minted by adding one XUSDT through smart contracts and price oracles.
Tether Introduces Tethered Assets
Tether allows investors to perform transactions using aUSDT while retaining gold-backed Tether. AUSDT was created by Tether subsidiary Moon Gold and Moon Gold El Salvador. Alloy from Tether is going to work as part of the real-world asset tokenization forum that is set to launch later this year as per CEO Paolo Ardoino.
The aUSDT token is not the first synthetic dollar. In August 2022, Galoy launched a Bitcoin-backed synthetic dollar named Stablesats on the Lightening Network.
The synthetic dollar is widely regarded asset type that rose to prominence with Ethena Labs’ Ether-backed and dollar-pegged USDe in February. Asymmetry also launched a synthetic dollar in June that was managed in an algorithmic manner.
Analysis of the project compared aUSDT with USDe pointed out the benefit of high liquidity in Tether leading to smarter decisions and lessening principal agent risk on account of centralized infrastructure.
Tether has incentivized the investors with 2:1 ratio to USDT holders as a bonus and put 10 million aUSDT for the payments. Another report indicates that Tether has plans to invest around $1 billion within a year.
The stablecoin project is not a traditional VC firm however the platform is set to spend around $2 billion in the latest technologies such as AI and alternative financial solutions during the last two years.
Tether to Invest in New Technologies
The VC arm of Tether has shared plans to invest big in emerging tech such as AI and biotechnology as per CEO Ardoino. Tether has projected investing at least a minimum of $1 billion in deals with the latest technology projects and solutions providers in the upcoming 12 months. Ardoino was speaking with journalists from Bloomberg when he revealed that idea in June.
As per the executive, Tether has a team of 15 members who processed hundreds of proposals such as AI and alternative finance during the last two years.
The CEO noticed that the platform is working on developing the ability to offer AI computational option for all invested firms. The stablecoin issuer has already invested nearly $1 billion in AI.
Speaking with Bloomberg, Ardoino noted that the platform has the ability to offer AI computing solutions to all the affiliated firms with Tether. He stated that investing in the latest tech solutions enables disintermediation of TradeFi. Tether reported a net profit of $4.52 billion for the first quarter of 2024.
The majority of profits stemmed from $3.52 billion and was generated from gold and Bitcoin investments of the firm. Meanwhile, an additional $1 billion was generated out of operating profits. Tether retained that startups in the network have to complete preset targets in order to qualify for investment consideration.
