{"id":14248,"date":"2022-11-01T17:07:16","date_gmt":"2022-11-01T17:07:16","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/following-the-great-ust-collapse-a-defi-project-plans-to-launch-a-soft-pegged-stablecoin-built-on-terra-bitcoin-news\/"},"modified":"2022-11-01T17:07:16","modified_gmt":"2022-11-01T17:07:16","slug":"following-the-great-ust-collapse-a-defi-project-plans-to-launch-a-soft-pegged-stablecoin-built-on-terra-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/following-the-great-ust-collapse-a-defi-project-plans-to-launch-a-soft-pegged-stablecoin-built-on-terra-bitcoin-news\/","title":{"rendered":"Following the Great UST Collapse, a Defi Project Plans to Launch a ‘Soft-Pegged Stablecoin’ Built on Terra \u2013 Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
\n<\/p>\n

\n
\n<\/header>\n
\n<\/div>\n

Following the Terra stablecoin collapse last May, the Terra blockchain ecosystem has another stablecoin concept in the works called \u201cSolid.\u201d The stablecoin Solid and its white paper were revealed by a decentralized finance (defi) project, Capapult Finance, and the idea has been dubbed a \u201csoft-pegged stablecoin\u201d built on Terra.<\/strong><\/p>\n

Terra Blockchain Ecosystem to See a New Stablecoin Called Solid<\/h2>\n

Roughly five months ago, the crypto community experienced some dark days<\/a> when the stablecoin terrausd (UST), now called terraclassicusd (USTC)<\/a>, depegged from its $1 parity. Today, USTC is changing hands for $0.03 per unit and the obliterated Terra blockchain ecosystem moved to a new network called the Phoenix blockchain<\/a>.<\/p>\n

With the Terra 2.0 network launch, the crypto community was introduced to a new native crypto called terra (LUNA) 2.0<\/a>. Following the stablecoin depegging incident, which wreaked havoc across the entire crypto economy, a defi project called Capapult Finance says it plans to launch a new \u201csoft-pegged stablecoin\u201d built on top of the Terra network called \u201cSolid.\u201d The stablecoin concept was revealed in a white paper called \u201cSolid, a Soft-Pegged Stablecoin on Terra.\u201d<\/p>\n

\"Following
Screenshot of the Solid white paper.<\/figcaption><\/figure>\n

The project\u2019s white paper<\/a> describes Solid as an \u201cover-collateralized and fully decentralized soft-pegged stablecoin on Terra.\u201d Unlike the original Terra blockchain white paper co-authored by Do Kwon, the authors of the Solid white paper are represented by the six alpha-numeric digits of two addresses \u2014 \u201c0x7183, 3A2k4j.\u201d<\/p>\n

The white paper published on Oct. 19, 2022, stresses that there\u2019s a need for stable assets in the world of defi, but fiat-backed stablecoins don\u2019t cut it, according to the white paper\u2019s authors. \u201cFiat-backed stablecoins are not in the owners\u2019 control, as was showcased by the Tornado Cash ban,\u201d the white paper notes. The stablecoin\u2019s paper, hosted on the Capapult Finance website, adds:<\/p>\n

\n

Thus, to make blockchain technology more common there needs to be an asset with minimal volatility, one that is as decentralized as possible. It is becoming more obvious each and every day that decentralized money needs a decentralized stablecoin.<\/p>\n<\/blockquote>\n

The paper says Solid will be minted using a collateralized debt position (CDP) scheme similar to Makerdao, and users deposit interest-earning collateral and borrow the stablecoin. The mechanism also works alongside Capapult Finance\u2019s governance token CAPA, and the project claims to \u201cbring honesty and trust to Web3, join us in our journey to a fully decentralized ecosystem.\u201d<\/p>\n

Solidus or Solid claims to offer low volatility and stability via the interest-earning collateral held on the Capapult protocol. As far as the Capapult protocol\u2019s website is concerned, the site says the application is \u201ccoming soon.\u201d At the time of writing, the entire stablecoin economy is valued at $146.44 billion and the top two stablecoins (USDT<\/a> & USDC) are fiat-backed crypto assets. Two projects within the stablecoin economy that leverage a CDP method, or over-collateralized scheme, include Makerdao\u2019s DAI and Tron\u2019s USDD.<\/p>\n

It\u2019s worth noting that a number of crypto supporters believe the onset of the harsh crypto winter was fueled by Terra\u2019s demise. Some of the accusations directed at Terraform Labs executives like Do Kwon<\/a>, and failed projects like the defi lending platform Anchor, have further tainted the community\u2019s trust in the Terra ecosystem.<\/p>\n

While the Capapult Finance website promises the project will bring \u201chonesty and trust to Web3,\u201d it will be interesting to see if the crypto community trusts a stablecoin built on a fractured blockchain ecosystem like Terra.<\/p>\n

\n
\nTags in this story
\n<\/h6>\n
0x7183<\/a>, 3A2k4j<\/a>, Anchor<\/a>, Capapult Finance<\/a>, Capapult protocol<\/a>, CDP<\/a>, collateralized debt position<\/a>, do kwon<\/a>, fractured blockchain ecosystem<\/a>, Makerdao\u2019s DAI<\/a>, Mistrust<\/a>, over-collateralized scheme<\/a>, Solid<\/a>, Solid white paper<\/a>, Solidus<\/a>, Stablecoin<\/a>, stablecoin asset<\/a>, stablecoin terra<\/a>, Stablecoins<\/a>, Terra ecosystem<\/a>, Tron\u2019s USDD<\/a>, trust<\/a><\/div>\n<\/div>\n

What do you think about the soft-pegged stablecoin idea that the defi project Capapult Finance says it plans to launch? Let us know what you think about this subject in the comments section below.<\/strong><\/em><\/p>\n

\n
\n<\/div>\n
\n
\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

\n
\n
\n<\/a>
\n<\/span>\n<\/p>\n<\/div>\n<\/div>\n

Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

\n

Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

\n