Tether Launches Alloy: A Digital Asset Backed by Tether Gold (XAU₮)
Lawrence Jengar Jun 17, 2024 15:02
Tether introduces Alloy, a new digital asset backed by Tether Gold (XAU₮), offering stability and security in the digital economy.
Tether, a leading company in the cryptocurrency industry, has officially launched Alloy by Tether, a pioneering digital asset backed by Tether Gold (XAU₮). The development was carried out by Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V., both part of the Tether Group, aiming to combine the stability of a fiat currency with the security of gold.
Innovative Tethered Assets
Alloy by Tether introduces a new class of digital assets known as tethered assets, which aim to track the price of reference assets through stabilization strategies such as over-collateralization with liquid assets and secondary market liquidity pools. This approach ensures consistent value and stability between the reference asset and its tethered counterpart.
First Token: aUSD₮
The first token in the Alloy by Tether lineup is aUSD₮, designed to track the value of one US dollar. Unique to aUSD₮ is its over-collateralization by Tether Gold (XAU₮), backed by physical gold stored in Switzerland. This allows users to engage in digital transactions, payments, and remittances with a currency that maintains the familiarity of the US dollar without selling their XAU₮.
Alloy by Tether smart contracts are currently deployed on the Ethereum Mainnet. Users can mint aUSD₮ by depositing Tether Gold (XAU₮) as collateral through Ethereum-compatible smart contracts. These contracts ensure transparency by tracking all collateral and minted tokens, using Price Oracles to constantly evaluate the Mint to Value (MTV) ratio.
Future Prospects and Institutional Integration
Alloy by Tether is an open platform that allows the creation of various tethered assets, potentially including yield-bearing products. This technology offers a modern approach to asset management for institutions by providing a secure, gold-backed digital asset that can be integrated into portfolios. Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., authorized by the CNAD in El Salvador, will handle the issuance and management of Alloy by Tether, catering to different customer segments and regulatory requirements.
Paolo Ardoino, CEO of Tether, remarked, “We are thrilled to announce the launch of Alloy by Tether, introducing a class of digital assets backed by gold and tethered to a reference fiat currency. This innovative solution marks an exciting milestone, and we eagerly anticipate how it will interact with the rest of the market. Moreover, we plan to make this innovative technology available in our upcoming digital asset tokenization platform.”
For more information on Alloy by Tether, visit the official Tether website.
About Alloy by Tether
Alloy by Tether aims to redefine stability in the digital space by combining a stable unit of account with the security of gold. Acting as a digital currency linked to physical gold, Alloy by Tether offers users and institutions a secure option for transactions and asset management. Users can create Alloy by Tether tokens using Tether Gold as collateral, ensuring a connection to the stability of gold. Alloy by Tether provides a modern approach to asset management by incorporating tethered assets into portfolios, combining the reliability of gold with the efficiency of digital assets.
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