A stablecoin protocol defines the rules and smart contracts governing a stablecoin’s issuance, redemption, and value stabilization mechanisms. These protocols determine how a stablecoin maintains its peg to a reference asset, whether through collateral backing or algorithmic adjustments. They establish the operational framework for the stablecoin’s economic functionality. Such protocols are central to stablecoin reliability.
Context
The design and robustness of stablecoin protocols are under intense scrutiny by global regulators and market participants. Their systemic importance in decentralized finance makes their resilience a critical factor. Debates frequently focus on reserve transparency, auditability, and the effectiveness of peg maintenance during periods of market stress.
Usual Protocol's $10M Series A validates its RWA-backed stablecoin model, integrating traditional finance with DeFi composability and user-centric ownership.
Ethena's USDe stablecoin demonstrates robust product-market fit, scaling to $12.4 billion supply and generating $61 million in revenue, underscoring its capital efficiency within DeFi.
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