The Stablecoins Driving Blockchain Adoption

Quantstamp Labs
August 27, 2020

2020 has been a milestone year for stablecoins, which experienced record-setting transaction volumes of more than $90 billion in Q1 alone. Their role in decentralized finance—a sector that has also experienced massive growth— is also broadening.

Transactions within a decentralized system can often be processed faster and more securely. However, volatility, uncertainty and global regulations have kept digital assets from being widely adopted. Stablecoins combine the transparency, security, and privacy of a digital asset with the stability of traditional currency. However, as stablecoins make up an increasingly higher proportion of our global currency, security is crucial. Being pegged to real-world assets means that stablecoins represent real and significant value.

Whether government-sponsored, exchange-driven and crypto-native stablecoins, Quantstamp is proud to help support the mainstream adoption of blockchain technology through numerous stablecoin audits. Here are some of the stablecoins we’ve secured that are changing the future of our financial system:


Government-Sponsored

xSGD

What: A regulated Singapore dollar, fully collateralized by SGD | Issuer: xFers

Xfers is a Southeast Asia’s leading Fintech platform for digital businesses, under the project name of StraitsX. Singapore is often considered one of the most progressive jurisdictions around the world when it comes to financial regulations. 

xSGD provides an opportunity for local consumers who want to explore the benefits of digital assets while maintaining regulatory assurances.


Naira Token (NGNT)

What: An ERC 20 token that’s fiat-backed with Naira  | Issuer: BuyCoins

NGNT is an ERC 20 token that’s fiat-backed with real Naira—the official currency of Nigeria—held in licensed banks. The token bridges the Naira with the advantages of digital currency, giving cryptocurrency traders, business owners, and software developers the ability to transact with the Naira across the blockchain. 

With Nigeria being the largest market in Africa, the Naira Token offers a huge advantage for users that want to perform fast, publicly-verifiable, borderless transactions.


BIDR

What: A regulated stablecoin collateralized by the Indonesian Rupiah | Issuer: Tokocrypto

BIDR is pegged to Indonesia’s fiat currency and runs on the Binance Chain. Stablecoins can be a key part of fiat money spreading around the crypto ecosystem. The Indonesian public has a very high interest in blockchain technology and cryptocurrencies, so BIDR will help people wanting to buy and trade cryptocurrencies with the Indonesian Rupiah. 

In June 2020, Binance launched the stablecoin on its own blockchain in collaboration with Tokocrypto, an Indonesian crypto exchange.


Exchange-Driven


Binance GDP Stablecoin

What: A GBP-pegged stablecoin | Issuer: Binance

Quantstamp was honored to be chosen to audit BGBP,  the very first stablecoin on Binance. While there were other stablecoins on the market at that time including Coinbase’s USDC, Facebook’s Libra, MakerDAO’s Dai, and Bitfinex’s Tether, BGBP is the first major stablecoins to be pegged to the British pound. 

At the time of its launch, Binance’s Chief Financial Officer announced that this would be the first of many stablecoins on the Binance Chain. 


eToro eToken

What: A USD-denominated stablecoin built on the Libra Network | Issuer: eToro

By using blockchain technology to eliminate the need for certain intermediaries, Facebook’s Libra blockchain aimed to reduce the cost of financial services and enhance economic activity in underserved areas. 

Tokens play an important role in smart contract platforms like Libra. eToro’s eToken was not only one of the first tokens developed for the Libra blockchain, but it was also the first Libra token standard to receive adoption by developers. 


Crypto-Native

Maker Foundation (Dai)

What: Decentralized cryptocurrency stabilized against the US dollar | Issuer: MakerDAO

MakerDAO is an open-source project on the Ethereum blockchain and a Decentralized Autonomous Organization. The Maker Protocol, also known as the Multi-Collateral Dai (MCD) system, lets users generate Dai by leveraging assets approved by “Maker Governance.” Dai is a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the US Dollar.

In March 2020, when Dai fell off its peg of roughly $1 USD, the DeFi community rallied together to form the Dai Backstop Syndicate, collectively functioning as a "buyer of last resort.”

Quantstamp stepped in to quickly secure the syndicate software protecting the community assets, and is also providing a smart contract coverage warranty via Chainproof to cover the value of the Backstop Contract.


Curvy DeFiDollar

What: An upcoming  index of stable coins that uses Defi primitives to stay near the dollar mark | @defidollar

DUSD is a stablecoin that is collateralized by Curve Finance liquidity provider (LP) tokens. It uses chainlink oracles for its stability mechanism. It uses Curve to handle the logic around integrating with lending protocols and token swaps; which are essential ingredients for the stability of DUSD. It provides yields to those who hold DUSD, and it also has a staking mechanism for additional peg safety.


xDai

What: USD stablecoin and multi-chain staking token | Issuer: xDai Stake

xDai is a crypto asset pegged to Dai that operates on a sidechain with near instantaneous transaction times and low transaction fees. The chain’s native xDai tokens are created by locking Dais in an Ethereum smart contract and can be redeemed for Dai once again at a later date. 

Use cases include peer-to-peer payments, community currencies, rewards for event participants, and more. In 2019, attendees of ETHDenver were able to make purchases with the stablecoin. In another case, the xDai chain has been used to manage currency trading among communities in Kenya.


rDai

What: Redeemable Dai token enabling the transfer of accruing interest | Issuer: Decentral

rDai (redeemable Dai) allows you to invest your money in an interest-generating pool, used for collateralized loans. rDai tokens allow you to direct the flow of interest earned from your Dai to other parties while maintaining full control of the principal Dai that you staked.

You can also decide who benefits from the generated interest: you can keep it yourself, donate it to a community fund or charity, or direct it to a dApp you are using.


Amples

What: Fully algorithmic, synthetic commodity money | Issuer: Ampleforth

Ampleforth is not a stablecoin, rather, an adaptive money that aims to fulfill many of the goals that stablecoins fulfill today. It does so with a twist: supply changes daily. The AMPL protocol automatically adjusts supply in response to demand. How does this work? The Ampleforth protocol receives exchange-rate information from trusted oracles, and propagates that to holders of its units (Amples) by proportionally increasing or decreasing the number of tokens each individual holds. By doing so, each person’s percent ownership of the network remains fixed.

“Being audited by Quanstamp was important to us,” said Ampleforth CTO Brandon Iles. “They hold their clients and themselves to the highest security standards. We know that identifying any risks and vulnerabilities is critical to mitigating the risk of any future hacks.”


Good Dollar

What: USD Stablecoin distributing UBI programmatically | Issuer: eToro

GoodDollar is a non-profit, social innovation initiative attempting to create a framework for generating and distributing universal basic income. eToro is GoodDollar’s corporate sponsor and provided the initial funds. 

The live beta-launch is planned for the fall of 2020, which will include the GoodDollar protocol and currency. 

More Stablecoins

TrueUSD

What: A regulated stablecoin collateralized by USD | Issuer: TrustToken

TrueUSD was the first regulated stablecoin fully backed by the US Dollar. It’s also the first asset token built on the TrustToken platform, a place to create asset-backed tokens that can be bought and sold around the world. 

Their mission is to expand access to financial opportunities and global trade, and its US dollar holdings are distributed in various bank accounts belonging to different trust companies. 


StablyUSD

What: USD collateralized and FDIC-insured stablecoin | Issuer: Stably

StablyUSD is a reserve-backed stablecoin designed to work across multiple blockchain protocols. Stably, the issuer of StablyUSD tokens, has a centralized model where every token issued is backed with an equivalent unit of fiat currency in a reserve managed by Stably.

In the future, Stably plans to release more stablecoins backed by other national currencies along with commodities and precious metals, such as gold and silver. They also intend to expand to other blockchains with better speed, scalability, and security.

What’s Next

While there are issues to address in regards to scalability, security and legislation, stablecoins have a huge opportunity for growth. They have the potential to unlock cheaper, faster, and more efficient transactions across the world, and better serve the 1.7 billion people globally that remain underbanked.

As digital currencies begin to make up more of our global currency, effectively securing these stablecoins will be a key part of building the trust that traditional fiat has today. 



Quantstamp Labs
August 27, 2020

2020 has been a milestone year for stablecoins, which experienced record-setting transaction volumes of more than $90 billion in Q1 alone. Their role in decentralized finance—a sector that has also experienced massive growth— is also broadening.

Transactions within a decentralized system can often be processed faster and more securely. However, volatility, uncertainty and global regulations have kept digital assets from being widely adopted. Stablecoins combine the transparency, security, and privacy of a digital asset with the stability of traditional currency. However, as stablecoins make up an increasingly higher proportion of our global currency, security is crucial. Being pegged to real-world assets means that stablecoins represent real and significant value.

Whether government-sponsored, exchange-driven and crypto-native stablecoins, Quantstamp is proud to help support the mainstream adoption of blockchain technology through numerous stablecoin audits. Here are some of the stablecoins we’ve secured that are changing the future of our financial system:


Government-Sponsored

xSGD

What: A regulated Singapore dollar, fully collateralized by SGD | Issuer: xFers

Xfers is a Southeast Asia’s leading Fintech platform for digital businesses, under the project name of StraitsX. Singapore is often considered one of the most progressive jurisdictions around the world when it comes to financial regulations. 

xSGD provides an opportunity for local consumers who want to explore the benefits of digital assets while maintaining regulatory assurances.


Naira Token (NGNT)

What: An ERC 20 token that’s fiat-backed with Naira  | Issuer: BuyCoins

NGNT is an ERC 20 token that’s fiat-backed with real Naira—the official currency of Nigeria—held in licensed banks. The token bridges the Naira with the advantages of digital currency, giving cryptocurrency traders, business owners, and software developers the ability to transact with the Naira across the blockchain. 

With Nigeria being the largest market in Africa, the Naira Token offers a huge advantage for users that want to perform fast, publicly-verifiable, borderless transactions.


BIDR

What: A regulated stablecoin collateralized by the Indonesian Rupiah | Issuer: Tokocrypto

BIDR is pegged to Indonesia’s fiat currency and runs on the Binance Chain. Stablecoins can be a key part of fiat money spreading around the crypto ecosystem. The Indonesian public has a very high interest in blockchain technology and cryptocurrencies, so BIDR will help people wanting to buy and trade cryptocurrencies with the Indonesian Rupiah. 

In June 2020, Binance launched the stablecoin on its own blockchain in collaboration with Tokocrypto, an Indonesian crypto exchange.


Exchange-Driven


Binance GDP Stablecoin

What: A GBP-pegged stablecoin | Issuer: Binance

Quantstamp was honored to be chosen to audit BGBP,  the very first stablecoin on Binance. While there were other stablecoins on the market at that time including Coinbase’s USDC, Facebook’s Libra, MakerDAO’s Dai, and Bitfinex’s Tether, BGBP is the first major stablecoins to be pegged to the British pound. 

At the time of its launch, Binance’s Chief Financial Officer announced that this would be the first of many stablecoins on the Binance Chain. 


eToro eToken

What: A USD-denominated stablecoin built on the Libra Network | Issuer: eToro

By using blockchain technology to eliminate the need for certain intermediaries, Facebook’s Libra blockchain aimed to reduce the cost of financial services and enhance economic activity in underserved areas. 

Tokens play an important role in smart contract platforms like Libra. eToro’s eToken was not only one of the first tokens developed for the Libra blockchain, but it was also the first Libra token standard to receive adoption by developers. 


Crypto-Native

Maker Foundation (Dai)

What: Decentralized cryptocurrency stabilized against the US dollar | Issuer: MakerDAO

MakerDAO is an open-source project on the Ethereum blockchain and a Decentralized Autonomous Organization. The Maker Protocol, also known as the Multi-Collateral Dai (MCD) system, lets users generate Dai by leveraging assets approved by “Maker Governance.” Dai is a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the US Dollar.

In March 2020, when Dai fell off its peg of roughly $1 USD, the DeFi community rallied together to form the Dai Backstop Syndicate, collectively functioning as a "buyer of last resort.”

Quantstamp stepped in to quickly secure the syndicate software protecting the community assets, and is also providing a smart contract coverage warranty via Chainproof to cover the value of the Backstop Contract.


Curvy DeFiDollar

What: An upcoming  index of stable coins that uses Defi primitives to stay near the dollar mark | @defidollar

DUSD is a stablecoin that is collateralized by Curve Finance liquidity provider (LP) tokens. It uses chainlink oracles for its stability mechanism. It uses Curve to handle the logic around integrating with lending protocols and token swaps; which are essential ingredients for the stability of DUSD. It provides yields to those who hold DUSD, and it also has a staking mechanism for additional peg safety.


xDai

What: USD stablecoin and multi-chain staking token | Issuer: xDai Stake

xDai is a crypto asset pegged to Dai that operates on a sidechain with near instantaneous transaction times and low transaction fees. The chain’s native xDai tokens are created by locking Dais in an Ethereum smart contract and can be redeemed for Dai once again at a later date. 

Use cases include peer-to-peer payments, community currencies, rewards for event participants, and more. In 2019, attendees of ETHDenver were able to make purchases with the stablecoin. In another case, the xDai chain has been used to manage currency trading among communities in Kenya.


rDai

What: Redeemable Dai token enabling the transfer of accruing interest | Issuer: Decentral

rDai (redeemable Dai) allows you to invest your money in an interest-generating pool, used for collateralized loans. rDai tokens allow you to direct the flow of interest earned from your Dai to other parties while maintaining full control of the principal Dai that you staked.

You can also decide who benefits from the generated interest: you can keep it yourself, donate it to a community fund or charity, or direct it to a dApp you are using.


Amples

What: Fully algorithmic, synthetic commodity money | Issuer: Ampleforth

Ampleforth is not a stablecoin, rather, an adaptive money that aims to fulfill many of the goals that stablecoins fulfill today. It does so with a twist: supply changes daily. The AMPL protocol automatically adjusts supply in response to demand. How does this work? The Ampleforth protocol receives exchange-rate information from trusted oracles, and propagates that to holders of its units (Amples) by proportionally increasing or decreasing the number of tokens each individual holds. By doing so, each person’s percent ownership of the network remains fixed.

“Being audited by Quanstamp was important to us,” said Ampleforth CTO Brandon Iles. “They hold their clients and themselves to the highest security standards. We know that identifying any risks and vulnerabilities is critical to mitigating the risk of any future hacks.”


Good Dollar

What: USD Stablecoin distributing UBI programmatically | Issuer: eToro

GoodDollar is a non-profit, social innovation initiative attempting to create a framework for generating and distributing universal basic income. eToro is GoodDollar’s corporate sponsor and provided the initial funds. 

The live beta-launch is planned for the fall of 2020, which will include the GoodDollar protocol and currency. 

More Stablecoins

TrueUSD

What: A regulated stablecoin collateralized by USD | Issuer: TrustToken

TrueUSD was the first regulated stablecoin fully backed by the US Dollar. It’s also the first asset token built on the TrustToken platform, a place to create asset-backed tokens that can be bought and sold around the world. 

Their mission is to expand access to financial opportunities and global trade, and its US dollar holdings are distributed in various bank accounts belonging to different trust companies. 


StablyUSD

What: USD collateralized and FDIC-insured stablecoin | Issuer: Stably

StablyUSD is a reserve-backed stablecoin designed to work across multiple blockchain protocols. Stably, the issuer of StablyUSD tokens, has a centralized model where every token issued is backed with an equivalent unit of fiat currency in a reserve managed by Stably.

In the future, Stably plans to release more stablecoins backed by other national currencies along with commodities and precious metals, such as gold and silver. They also intend to expand to other blockchains with better speed, scalability, and security.

What’s Next

While there are issues to address in regards to scalability, security and legislation, stablecoins have a huge opportunity for growth. They have the potential to unlock cheaper, faster, and more efficient transactions across the world, and better serve the 1.7 billion people globally that remain underbanked.

As digital currencies begin to make up more of our global currency, effectively securing these stablecoins will be a key part of building the trust that traditional fiat has today. 



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