The stablecoins of DeFi protocols

The innovative decentralized DAI and MIM stablecoins have demonstrated that the market has an appetite for new cryptocurrencies with novel approaches to providing an asset with an intended stable fiat value. Now two players in the DeFi world aim to push the evolution of stablecoins another step forward.

Two protocols will release their own new stablecoins in the coming months: AAVE and Curve.

AAVE dominates the lending and borrowing market. The AAVE DAO has voted to create a new stablecoin that they have named GHO. GHO will be overcollateralized by 120% to 150%. Users can mint GHO by choosing from a diverse group of approved crypto assets and sending funds to back their desired GHO tokens with a collateral escrow. By overcollateralizing, the group seeks to create extra security and confidence and win some market share from their more established competitors.

Curve, one of the first Dexes in DeFi, also plans to release its crvUSD stablecoin with the aim of enhancing protocol sustainability by making exchanges within the protocol more efficient. Curve is playing their cards close; they have not provided any details about how it will work. Some think that CRV stakers will be able to earn dividends from the platform in the form of crvUSD. Curve is a big player, and the eyes of DeFi users are definitely on this new coin.

Stablecoins represent 15% of the total crypto token market today and we are confident they will play a leading role in the coming years.

But how safe are these decentralized stablecoins? Will the market trust them? What’s your opinion? Are you ready to try them?