Tether is launching Alloy, a new platform that combines the stability of the U.S. dollar with the security of gold. The first token, aUSD₮, is backed by Tether Gold, stored as physical gold reserves in Switzerland.
Alloy by Tether offers a stable digital asset backed by Tether Gold’s physical reserves stored in Swiss vaults. Using smart contracts, Alloy ensures transparent minting of aUSD₮, with Price Oracles monitoring its value. This platform provides a secure, gold-backed digital asset for both individuals and institutions.
Alloy by Tether: Combining Gold and Dollar Stability
Alloy, developed by Tether subsidiaries Moon Gold NA, S.A. de C.V., and Moon Gold El Salvador, S.A. de C.V., introduces the concept of “tethered assets.” These assets are designed to track the value of reference assets like the U.S. dollar through over-collateralization and secondary market liquidity pools.
The first token on the platform, aUSD₮, is pegged to the U.S. dollar and backed by Tether Gold (XAU₮). This allows users to transact, pay, and send remittances using a digital currency that mirrors the stability of the U.S. dollar without having to sell their gold holdings.
Alloy operates on the Ethereum mainnet, using smart contracts to mint aUSD₮ tokens. Users can deposit Tether Gold as collateral, a process governed by Ethereum-compatible smart contracts. These contracts maintain the system’s integrity by continuously monitoring the collateralization ratio through price oracles.
Alloy by Tether: Expanding Digital Asset Horizons
The platform is designed to be open, allowing for the development of various tethered assets with different backing mechanisms, including potential yield-bearing products. This flexibility extends its use beyond individuals to institutional investors seeking a secure, gold-backed digital asset for their portfolios.
Paolo Ardoino, CEO of Tether, expressed his excitement about Alloy’s launch, emphasizing its role in blending digital innovation with the stability of gold-backed assets. He highlighted its potential impact on the market and hinted at future integrations within Tether’s tokenization platform.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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