$ 3 million fundraising for its UXD stablecoin

UXD protocol, integrated in Solana, raises $ 3 million

The weeks go by and look the same for Solana (SOL). After reaching the 100 dollars, largely exceeded since, certain associated projects start to make speak about them. This is the case of the UXD protocol, which was previously called Soteria, and which is exclusively designed on the Solana blockchain. The founders have just announced that they have raised $ 3 million.

1 / We are excited to announce that we have raised a seed round led by @multicoincap with participation from @AlamedaResearch, @DeFianceCapital, @cmsholdings, @Solana Foundation, @MercurialFi, @aeyakovenko, @rajgokal, and @Saber_HQ founder @DylanMacalinao! https://t.co/BIwOfaWHx9

– UXD Protocol (@UXDProtocol) September 2, 2021

This funding round was led by Multicoin Capital, an investment fund specializing in projects involving digital assets. Other venture capitalists, such as Alameda Research, CMS Holdings or Defiance Capital, have participated in raising funds for the UXD protocol.

The founder of the project assured that the funds will be used in particular to recruit developers and more generally to strengthen the team. They will also be used to launch the protocol testnet network in September and the mainnet network in October.

πŸ‘‰ Find all the news about altcoins here

The absence of volatility of UXD stablecoin guaranteed by an algorithm

Unlike other well-known stablecoins USDT or USDC, UXD is not backed by US dollars alone, but not an algorithm. This means that the protocol uses several cryptocurrencies as collateral and that the algorithm takes care of the allocation between each crypto-asset to maintain stability.

At first, the protocol will only use Bitcoin (BTC), Ether (ETH) and SOL as collateral. For those in the know, the UXD works equivalent to MakerDAO’s DAI which also uses an algorithm to maintain its stability.

This algorithmic approach is riskier than that of collateralizing with fiat money, since the value of the cryptocurrencies used can plunge overnight. The FEI protocol, for example, saw the value of its algorithmic guaranteed stablecoin plummet last April.

FEI dropped down to $ 0.136. In the process, it should have taught everyone a few lessons about stablecoin design and, perhaps, crypto investing.

A thread. pic.twitter.com/z6d2MPbZH2

– Emin GΓΌn SirerπŸ”Ί (@ el33th4xor) April 7, 2021

The founder of the UXD protocol does not deny the difficulties that stablecoins guaranteed by algorithms can cause. On the other hand, he believes that it is the absence of a 100% guarantee that has not made it possible to maintain this stability. And he thinks UXD has found the right solution: the neutral Delta position.

πŸ‘‰ To read – What is MakerDAO, Dai and where to buy?

UXD, the first real decentralized stablecoin?

The UXD protocol could also be the first true decentralized stablecoin. Indeed, despite growing popularity and a perennial presence in the top 10 largest capitalizations, Tether and USD Coin are both centralized protocols.

Beyond the lack of confidence in the two entities, the two entities controlling the USDT and the USDC, it is rather the regulatory side that can be of concern. Thus, Tether has recently had some concerns with the American justice system and Circle, the entity behind the USDC, preferred to play absolute transparency in order to prove the solidity of its stablecoin.

Despite its algorithmic nature, the DAI is highly dependent on the USDC which represents more than half of the guarantee according to Dai Stats. However, we know that centralized stablecoins are used a lot in decentralized finance (DeFi), which is a bit contradictory.

Can a fully decentralized stablecoin overshadow the USDT and USDC giants in DeFi? It remains to be seen.

πŸ‘‰ To go further – Euro stablecoins are making a place for themselves in the DeFi ecosystem

Fundraising as SOL continues to break records

Although the two pieces of information are not linked, this fundraising is one more positive news for Solana. The price of SOL has exploded since July, going from around 20 to more than 140 dollars, and almost every day reaches a new record.

All signals are green for Solana and, barring a stock market crash or the price of cryptocurrencies, it is difficult to see the exponential growth of the price stop overnight.

πŸ‘‰ Our page to follow the SOL course

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About the author: Benjamin Allouch

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Formerly a lawyer specializing in personal data and digital law, I quickly became interested in Bitcoin, blockchain technology and their legal implications. I am now an independent consultant and writer in the field of cryptocurrencies and blockchain.
All articles by Benjamin Allouch.

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