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The new one1INCH stablecoin will be collateralized by USDC and 1inch’s native token.
1inch, a decentralised exchange aggregator, has collaborated with the ICHI platform to launch a new stablecoin tied to the US dollar.
On Thursday, 1inch announced plans to issue a stablecoin “with a blend” of its native 1INCH token and USD Coin (USDC) via ICHI’s Decentralized Monetary Authority, or DMA. The new one1INCH stablecoin – all ICHI issuers begin with the prefix “one,” according to its Japanese namesake — is designed to serve as a means of exchange for paying operational expenditures, providing liquidity, and distributing liquidity incentives.
“The one1INCH stablecoin has the potential to become an economic game changer,” says oneinch co-founder Sergej Kunz. “At scale, because it is minted and over-collateralized with 1INCH tokens, its treasury can drive value back to 1inch DeFi operations.”
ICHI’s DMA, which was launched in May, enables projects to build and manage their own fully-collateralized stablecoins — in this example, with 1inch’s native 1INCH token and USDC — that can be created and redeemed for a fixed value of $1. The non-profit arm of 1inch, the 1inch Foundation, and ICHI will each give $100,000 in tokens as collateral for the stablecoins, allowing the one1INCH tokens to be produced with an 80% USDC and 20% 1INCH split.
As projects seek alternatives to traditional stablecoins, ICHI’s DMA might lead to an increase in the number of US-dollar pegged tokens. Tether (USDT) is the most valuable stablecoin, with a market value of more than $62 billion, although other projects, such as Binance USD (BUSD), USDC, and Dai (DAI), have a significant market share. TerraUSD (UST), TrueUSD (TUSD), Paxos Standard (PAX), HUSD, Neutrino USD (USDN), and Gemini Dollar are some more US dollar stablecoins (GUSD).