What is a "related" asset?
Related assets refer to digital tokens that are designed to track the price of certain benchmark assets, such as the US dollar or gold.
These currencies, also known as stablecoins, can be backed by different types of collateral, such as gold, certain fiat currencies, or a diversified portfolio of assets.
This flexibility allows related assets to track the prices of a wide range of assets, including major fiat currencies, commodities such as oil or wheat, and even other financial instruments.
The key characteristic of related assets is the maintenance of value stability through various mechanisms, such as excessive collateral and liquidity in secondary markets, which allows their value to be closely linked to the reference asset, and the goal is, of course, that their value or price does not move away from each other.
Source: cointelegraph
Alloy (aUSD₮) – Tether's stablecoin
Alloy (aUSD₮) is the first Tether stablecoin to use Tether Gold (XAU₮) as collateral to maintain stability.
This digital token was created using EVM-compatible smart contracts, allowing for its interoperability within the Ethereum ecosystem and other compatible blockchains.
Using Tether Gold, Alloy is linked to gold, a traditional value asset known for its low volatility.
Each XAU₮ token represents one ounce (31.1 gram) of gold stored in a Swiss vault, ensuring stability and security for holders.
Source: cointelegraph
How does Alloy (aUSD₮) work?
Alloy (aUSD₮) works by combining the stability of the US dollar with the value characteristics of gold.
The key elements that enable the operation of aUSD₮ are excessive collateralization, smart contracts known as Vaults, and a liquidation mechanism.
Overcollateralization means that each aUSD₮ token is backed by a higher value of Tether Gold (XAU₮) than its face value, which serves as a hedge against gold price changes.
Users wishing to mint aUSD₮ must deposit more collateral than the value of the tokens they wish to create, and the maximum amount that can be minted is determined by the collateral-to-asset ratio, known as the liquidation point.
Vaults, Ethereum-compatible smart contracts, allow you to mint and manage aUSD₮, while independently verifying collateral by any third parties.
These contracts store the user’s collateral, unissued aUSD₮ tokens, and the user’s collateralized position data.
Liquidation occurs when the value of the collateral falls below a predetermined limit, and authorized liquidators can intervene, take over the collateral and recover the corresponding amount of aUSD₮.
This mechanism ensures the stability and integrity of the system.
Source: cointelegraph
How to get Alloy (aUSD₮)?
Users can acquire aUSD₮ in two ways: by transferring XAU₮ tokens to an aUSD₮ smart contract, which then mints and issues the corresponding amount of aUSD₮ tokens to the user’s address, or by trading aUSD₮ tokens on the secondary market through centralized exchanges like Bitfinex or decentralized exchanges (DEXs).
When acquiring aUSD₮, there are three types of fees: minting, returning, and liquidation.
The minting fee is 25 bps (0.25%) on each newly issued aUSD₮ token.
The refund fee is also 25 bps when exchanging aUSD₮ for underlying collateral.
The liquidation fee, which is applied when the customer’s position reaches the liquidation threshold, is 75 bps and is charged to liquidators for each liquidated XAU₮ token.
Source: cointelegraph
What are the benefits of aUSD₮?
AUSD₮ offers a number of advantages, including stability thanks to its peg to the US dollar, as well as gold backing.
This stability reduces the volatility often associated with cryptocurrencies, providing a reliable means of preserving value.
Additionally, aUSD₮ uses audibly smart contracts on the Ethereum blockchain, allowing for secure and transparent token minting and return processes.
The over-collateralization model and compatibility with the Ethereum ecosystem make it easy to generate yields and integrate with various decentralized finance (DeFi) platforms.
These characteristics make aUSD₮ a resilient alternative to the traditional banking system, offering investors stability, diversification, and the opportunity for passive income given the fact that you can use your gold investment as collateral to mint this stablecoin.
Source: cointelegraph
Tether token pegged to fiat (USD₮) vs. Tether Gold (XAU₮) vs. Alloy Tether (aUSD₮)
Tether (USD₮), Tether Gold (XAU₮), and Alloy Tether (aUSD₮) are three different approaches to stablecoins.
USD₮ is a stablecoin pegged to the US dollar, designed for everyday transactions, providing simplicity and security in the use of fiat currency on the blockchain.
On the other hand, XAU₮ is a gold-backed token that represents one ounce of physical gold, offering investors the opportunity to gain exposure to gold as a safe haven.
Alloy Tether (aUSD₮) combines the stability of the US dollar with the safety of gold, providing additional opportunities to generate yields through a unique over-collateralization mechanism.
While USD₮ is ideal for fast and stable transactions, XAU₮ and aUSD₮ offer investment opportunities through a gold backing, with aUSD₮ further enabling dollar stability with the potential for passive income.
It is up to you to Sami research how to take advantage of this opportunity to profit.
Source: cointelegraph
Conclusion
Alloy Tether (aUSD₮) represents an innovative combination of the stability of the US dollar and the security of gold, providing a unique investment opportunity through overcollateralization.
While USD₮ offers simplicity and stability for everyday transactions, and XAU₮ allows exposure to gold as a safe haven, aUSD₮ combines the best features of these two stablecoins.
With transparent and secure smart contracts, and compatibility with the Ethereum ecosystem, aUSD₮ offers investors not only stability and diversification, but also the opportunity for passive income.
In the world of digital finance, Alloy Tether sets new standards by providing gold-based stability and reliability, while also allowing for easy integration with modern DeFi platforms.
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