aUSD₮
A non-algorithmic, gold Backed, on chain, Tethered asset.
aUSD₮ is a Tethered Asset backed by Tether Gold, minted through the Vaults.
aUSD₮ is currently deployed on Ethereum Mainnet, and its address is the following:
| Address | ID | Chain |
|---|---|---|
0x9EEAD9ce15383CaEED975427340b3A369410CFBF | 1 | Ethereum |
aUSD₮ is designed to be tethered to the price of the US Dollar, thanks to the innovative Tethered Assets technology.
Core Features
Gold-Backed Stability: The cornerstone of Alloy by Tether is its complete backing by Tether Gold tokens, which represent ownership of physical gold. This approach is a first of its kind in the on-chain environment, setting a new standard for asset-backed cryptocurrencies. The use of collateral closely connected to gold, a historically stable and reliable asset, helps our digital currency maintain its value, especially during periods of high volatility across all markets.
User Empowerment in Asset Management: Users are at the forefront of this platform. Once KYCed and approved, they are given the autonomy to mint aUSD₮, manage their collateral and return aUSD₮ within the system. This process involves certain fees, such as those for minting and returning aUSD₮. If the user's position falls into liquidation, the user will incur charges during the liquidation process as their XAU₮ will be purchased from the liquidator. More informations on the liquidation process can be found here.
Security Features: Alloy by Tether incorporates critical security features, similar to those found in other Tether tokens like USD₮ and XAU₮. These features include the ability to blacklist addresses and freeze funds.
Minters of aUSD₮: In the aUSD₮ system are whitelisted individuals or institutions who engage in the creation (minting) of new units of aUSD₮. They use XAU₮ as collateral. XAU₮ represents ownership of gold, a time-honored asset known for its value retention. They can decide when to mint new aUSD₮, manage their XAU₮ collateral, and even return their aUSD₮ as and when they choose. This level of control allows minters to leverage their XAU₮ assets, converting them into aUSD₮ that can be easily transacted while retaining the underlying value.
Secondary Market Participants: Secondary Market participants may not be able to engage in the minting process or may be minters who wish to acquire or sell aUSD₮. Secondary market participants may wish to acquire aUSD₮ for a number of reasons including their perceived stability and usefulness as a unit of account.
Unified by Gold and Technology: Both minters and secondary market participants are united by the core principle of Alloy by Tether: the harmonious blend of gold’s timeless value with the innovative nature of decentralized blockchain technology. This combination permits users, whether they are actively minting or simply seeking a stable digital asset, to enjoy a currency that is intended to remain resilient against market swings and provides a reliable digital representation of value.
By marrying the timeless value of gold with the cutting-edge technology of blockchain, Alloy by Tether is expected to stand strong against market fluctuations while providing minters with control over their assets and offering secondary market participants a new, stable option in the digital currency landscape.
Maintaining aUSD₮'s Reference Price with the US Dollar through Arbitrage Mechanics
aUSD₮ are intended to be available to be bought and sold in secondary markets at the same time they can be minted and returned directly with the Vault. Where there is a difference between the market price of aUSD₮ and the 1 USD price that the price oracle maintains for each aUSD₮, a strategic opportunity known as arbitrage exists.
Managing Under-Peg Scenarios:
When aUSD₮'s value falls below 1 USD, it creates an opportunity for users who need aUSD₮ to close their CMP to buy aUSD₮ at a lower price and return it to the Vault where it will be valued at 1 USD, cashing in on an instant arbitrage.
Managing Over-Peg Scenarios:
If aUSD₮ trades above 1 USD, there is incentive for users to mint aUSD₮ (priced by the vault at 1 USD) and then sell it on the market (at a price above the dollar), thus increasing supply of aUSD₮ and helping return its price to the intended level.
Note: Both of these scenarios are possible because of a specific characteristic of the Alloy by Tether smart contracts, the Price Oracle, and therefore the Vaults always consider 1 aUSD₮ to be valued at 1 USD, regardless of the market price of aUSD₮.
Creating aUSD₮ and then allowing aUSD₮ into Circulation
Similar to the other Tether tokens like USDT, aUSD₮ tokens are "authorised but not issued" when they are created and deposited into the Vaults, ready to be minted by users. They are only considered "authorised and issued" when they are actually minted by user.
It is crucial to understand that aUSD₮ tokens only enter into circulation only once a user mints them against the Tether Gold tokens they provided as collateral. The aUSD₮ balance of the Alloy by Tether Vaults represents tokens that are waiting to be minted by users, and therefore have not yet entered into circulation.
To grasp the actual amount of aUSD₮ that are in the market, it is therefore important to consider the amount of tokens issued by the Vault, not the total amount of aUSD₮ existing on the chain.
aUSD₮ Logos
Last updated
