TL;DR Breakdown
- 1inch partners ICHI to unveil dollar-pegged stablecoin
- Growing use cases and demand for dollar-pegged stablecoin
The cryptocurrency space continues to record more growth and expansion as 1inch, a platform that focuses on finding the best deals across multiple decentralized exchanges (DEXs), announced its decision to launch a dollar-pegged stablecoin with the ICHI platform.
Announcing the new initiative via an official blog post, 1inch noted that the U.S. dollar-pegged stablecoin would be a combination of USD Coin (USDC) and 1inch’s native token (1INCH).
According to the announcement, the stablecoin will act as a means of trade to pay for operating costs, provide liquidity, and disburse liquidity rewards. Also, ICHI’s Decentralized Monetary Authority (DMA) will govern the new token.
Sergej Kunz, 1inch co-founder, in a statement, expressed his delight with the integration. According to him, the new dollar-pegged stablecoin can grow into an economic game-changer. He explained that the dollar-pegged stablecoin could bring value back to the 1inch DeFi system.
Additionally, the non-profit arm of 1inch and ICHI will respectively contribute $100,000 in tokens as collateral for the stable coins. This will allow for the one1INCH tokens to be minted using 80 percent USDC and 20 percent 1INCH.
Notably, 1inch recently expanded to Polygon Network. The move will provide 1inch users access to several Polygon-based liquidity sources that initially include Curve, SushiSwap, QuickSwap, Aave V2, and Cometh.
Growing use cases for dollar-pegged stablecoin
It is worth noting that the uses cases and demand for dollar-pegged stablecoin has recently skyrocketed. One of the main use cases for stablecoins is so people can hedge their funds when crypto prices become extremely volatile.
Since the recent market bearish run, demand for stablecoins rose dramatically. Many people turned to tether (USDT), which is by far the largest stablecoin in existence with a $58 billion market valuation. Tether also captures the most volume in terms of all the trade volume across the entire crypto economy.
Also, the colossal tether market capitalization, the second-largest stablecoin market valuation in the crypto economy, is held by USD coin (USDC). The stablecoin USDC commands a $15 billion market capitalization and has seen $5.4 billion in global trade volume during the last day.
However, other projects, including Binance USD (BUSD), USDC, and Dai (DAI), have a sizable market share. Furthermore, the U.S. dollar stablecoins include TerraUSD (UST), TrueUSD (TUSD), Paxos Standard (PAX), HUSD, Neutrino USD (USDN), and Gemini Dollar (GUSD).
Notably, the entire market valuation of all the stablecoins in existence (48) is about $120 billion, and digital currency prices being as volatile as they are will invariably ensure crypto-based fiat (dollar-pegged stablecoin) tokens will remain in demand.
