As USDX leverages the Flare network, this new development is expected to put the stablecoin before the different Flare-native projects.
By Godfrey Benjamin
Edited by Julia Sakovich
Updated
3 mins read
Hex Trust Group, a Hong Kong-based digital asset custodian managing billions in assets, has introduced a new stablecoin on the Layer-1 blockchain Flare Network.
The stablecoin, dubbed USDX, will become the first native stablecoin on Flare as the blockchain prepares for a boost in Decentralized Finance (DeFi) activity. Interested holders can access the stablecoin across lending protocols and exchanges.
USDX is maintained at a ratio of 1:1 against the United States dollars or any other equivalently valued asset. It would take part in lending, borrowing protocols, and perpetual futures exchanges. It will also feature a staking mechanism to a dedicated T-Pool, which is created by Clearpool, a decentralized credit marketplace.
The staking period is free of lock-up periods and it often maximizes returns through both base yield and bonus FLR incentives. Stakers of the USDX stablecoin will receive cUSDX as a reward for their staking action. A user can utilize this cUSDX as collateral across DeFi protocols on the Flare network.
According to the press release, Flare’s co-founder Hugo Philion noted:
“The collaboration between USDX and Clearpool on Flare delivers a 1:1 backed stable asset with immediate access to real world yield. This will be particularly useful for FAsset agents, putting their stable collateral to work even while it’s locked in the system.”
Hex Trust’s CEO Alessio Quaglini also believes in the possibility that the launch of USDX will “reduce cryptocurrency market volatility” and “streamline transactions”.
Notably, the USD-stablecoin was developed within Hex Trust’s tokenization ecosystem. In the long run, it could serve as a foundational component for Flare’s emerging DeFi and bridging ecosystem. It is largely believed that the debut of the stablecoin on Flare’s L1 blockchain could significantly contribute to mitigating crypto volatility.
It could also assist in streamlining transactions and elevating overall security and trust within the crypto space. As USDX leverages the Flare network, this new development is expected to put the stablecoin before the different Flare-native projects. Consequently, as USDX garners adoption, its utility is expected to expand massively, offering users new avenues to generate returns on their digital assets.
Generally, the stablecoin ecosystem has seen a spike in interest and demand in recent times, causing many protocols to push their forte into the niche.
About a month ago, crypto payments firm Ripple announced that it would be launching a US dollar-backed stablecoin to further bridge the gap between traditional finance and the cryptocurrency industry.
Similarly, Rune Christensen, the CEO and co-founder of MakerDAO, announced on X that a new decentralized stablecoin will emerge in the future that will replace DAI, a stablecoin pegged to the US dollar. Due to this growing interest, governments from different jurisdictions are tightening regulations around stablecoins.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
