Tether launches over-collateralized synthetic dollar aUSDT backed by physical gold Tether launches over-collateralized synthetic dollar aUSDT backed by physical gold
Tether's Alloy platform blends dollar stability with gold-backed security through Ethereum smart contracts.
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Updated: Jun. 17, 2024 at 3:12 pm UTC
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Tether has officially launched Alloy, a new platform introducing aUSD₮, a digital asset over-collateralized by Tether Gold (XAU₮). This innovative asset aims to combine the stability and familiarity of the US dollar with the enduring value of gold. The aUSD₮ token is designed to track the value of one US dollar, providing a stable unit of account while being backed by physical gold stored in Switzerland.
aUSD₮ is over-collateralized by Tether Gold, meaning that more value in gold is held as collateral than the value of the aUSD₮ tokens issued. This mechanism acts as a safety net, absorbing potential fluctuations in the value of the collateral asset, thereby ensuring stability and reliability. The minting and management of aUSD₮ are handled through Ethereum-compatible smart contracts. These contracts ensure transparency and security by keeping track of all collateral and minted tokens, using price oracles to evaluate the mint-to-value (MTV) ratio constantly.
aUSD₮ aims to provide the functional advantages of using the US dollar, such as its wide use in payments, trading, settlements, and savings, while incorporating the intrinsic benefits of gold, such as scarcity, low volatility, and preservation of purchasing power. Alloy by Tether is an open platform that will allow the creation of various Tethered Assets with broader backing mechanics, potentially including yield-bearing products. This flexibility enables the platform to cater to different customer segments and regulatory requirements.
Tether CEO Paolo Ardoino commented,
“Alloy by Tether is an open platform that allows to [users] create collateralised synthetic digital assets and will soon be part of the new Tether digital assets tokenisation platform, launching later this year.”
Alloy represents a significant step forward in the digital asset landscape, allowing users to mint stablecoins directly via the Alloy platform. By combining the stability of the US dollar with the security of gold, Tether aims to provide a reliable and versatile digital currency for everyday use and asset management. This new class of tethered assets hopes to redefine stability in the digital economy, offering users a modern approach to managing and transacting with digital assets.
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Liam 'Akiba' Wright
Also known as "Akiba," Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
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In this article
Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Tether Gold
$2,313.45
Tether Gold (XAU₮) is a digital asset offered by TG Commodities Limited.
Paolo Ardoino joined Bitfinex at the beginning of 2015 and now serves as Chief Technology Officer.
