Matrixport has listed 7 new stablecoins including Pax Dollar (USDP), Gemini Dollar (GUSD), Magic Internet Money (MIM), Liquity USD (LUSD), sUSD (SUSD), USDD (USDD), and Frax (FRAX). They are available on the Matrixport app; alongside other blue-chip cryptocurrencies like Bitcoin (BTC), Ether (ETH), stablecoins (USDT, USDC and BUSD), and many more. Users can deposit, withdraw and transfer these stablecoins on the app.
Below is an overview of the newly listed stablecoins and how each stablecoin is categorized.
Fiat-collaterized stablecoins are backed by a sovereign currency such as the U.S. dollar. They maintain reserves of the fiat currency as collateral to assure the stablecoin’s value. Below are fiat-collateralized stablecoins that we recently listed:
Pax Dollar (USDP) is pegged to the U.S. dollar and is backed by cash and cash equivalents held in reserve. It is regulated by the New York Department of Financial Services (NYDFS). USDP is also reviewed by an audit firm to verify that the supply matches the reserves of the U.S. dollar, along with an attestation report every month.
Gemini Dollar (GUSD) is created by the crypto exchange Gemini and is pegged to the U.S. dollar. GUSD is backed by cash and cash equivalents held across bank accounts and U.S. treasury bills. It is regulated by the New York Department of Financial Services (NYDFS). Attestations of GUSD’s reserves are published monthly by the accounting firm BPM LLP on the Gemini website.
Crypto-collateralized stablecoins are backed by cryptocurrency. Since cryptocurrency collateral is subject to high volatility, this type of stablecoin is usually over-collateralized to maintain its price stability. Below are crypto-collateralized stablecoins that we recently listed:
Magic Internet Money (MIM) is a decentralized stablecoin that is soft-pegged to the U.S. dollar. It is minted by Abracadabra protocol, a decentralized lending platform. The Abracadabra protocol mints MIM tokens by using interest-bearing crypto assets (ibTKNs) as collateral. Users can earn yield on the iBTKNs deposited as collateral while borrowing against them to receive MIM tokens. The price stability is maintained by a “mint-and-burn” mechanism, with new tokens being minted when demand is high and existing tokens being burned when the demand is low.
Liquity USD (LUSD) is an over-collateralized decentralized stablecoin pegged to the U.S. dollar. It is issued by Liquidity protocol, a decentralized borrowing platform that allows users to draw interest-free loans against Ether (ETH) used as collateral. LUSD is used to pay out the loans and can be used to redeem Ether (ETH) at any time at face value. LUSD’s value is maintained by an algorithm that adjusts the supply of the LUSD tokens according to the demand.
sUSD (SUSD) is a decentralized stablecoin issued by the Synthetix protocol and is pegged to the U.S. dollar. It is backed by staked SNX, Synthetix’s governance token. Users can mint sUSD by staking SNX tokens on the Synthetix platform, and the sUSD tokens acquired can be used for trading against other synthetic assets.
Algorithmic stablecoins maintain price stability by controlling supply and demand. It can increase the supply to bring the price down. Contrarily, if the demand decreases, the supply can be reduced to bring the stablecoin’s price back up. Algorithmic stablecoins may or may not hold reserves. Below is an algorithmic stablecoin that we recently listed:
USDD (USDD) is a decentralized stablecoin that is pegged to the U.S. dollar. It is managed through a TRON-based DAO and the peg is maintained through an algorithmic mechanism based on a “mint-and-burn” system with (TRON) TRX. The supply is backed by the TRON DAO reserve, consisting of diversified crypto assets such as Bitcoin (BTC) and USDC. USDD is mainly used to support the development of TRON’s DeFi ecosystem, offering yield opportunities to USDD holders.
Fractional-algorithmic stablecoins are partly backed by fractional reserves and partly stabilized algorithmically. This mechanism can reduce the amount of collateral needed as algorithms help adjust the supply of the stablecoin in response to the demand. Below is a fractional-algorithmic stablecoin that we listed:
Frax (FRAX) is the first fractional-algorithmic stablecoin. It is pegged to the U.S. dollar and is minted using both Frax Share (FXS) and USDC. It is currently collateralized by USDC and the collateralization ratio is based on the price of FRAX. If FRAX trades above the peg ($1), the protocol will decrease the collateral ratio to mint FRAX, and less USDC is required, and vice versa.
Matrixport is one of the world’s largest and most trusted digital assets ecosystems providing one-stop crypto financial services to meet the emerging needs of generating long-term wealth in digital assets. It forges strategic collaborations with early-stage Web3 innovators, helping them build, grow and scale and the company’s services include Cactus Custody™, spot OTC, fixed income, investment products (including Dual Currency), lending as well as asset management.
With USD4B in actively managed digital assets, Matrixport achieved a pre-money unicorn valuation in 2021 and was named by CB Insights as the 50 most promising blockchain companies in the world in 2022. Its digital prime brokerage business, Matrixport Institutional, serves 500+ institutions across the US, Europe and Asia, offering best-in-class access, leverage, capital Introduction and custody services. Headquartered in Singapore, the company holds a Hong Kong Trust Company License and a Swiss FINMA SRO-VQF Membership.