Former Babel Finance CEO and founder Flex Yang has launched a new decentralized stablecoin backed by a crypto-native reserve and the entire DeFi ecosystem built around it.
In an interview with TechCrunch, he said that Yang claims that the Hope stablecoin blends centralized finance (CeFi), decentralized finance (DeFi) and traditional finance (TradFi) to provide transparency that other so-called decentralized stablecoins lack. and security.
More specifically, the Hope stablecoin will be backed by reserves of bitcoin and ethereum, and will seek to sell tokens at a premium by relying on market makers and arbitrage traders when there is more demand for the newly minted stablecoin. Buy at lower prices to maintain the peg to the dollar. Discounted when there is less demand and burned tokens.
Yang said Hope is more like MakerDAO, the issuer behind the popular DeFi stablecoin Dai, but with “a range of additional features.” For example, HopeConnect, one of the Hope protocols, is a DeFi settlement and clearing application that allows users to trade derivatives across major exchanges without depositing assets on the CeFi platform.
“This means no CEX custody, no user credit risk, while bringing the CEX trading experience to DeFi. Users can access CEX liquidity in an anonymous and decentralized manner.”
While the Hong stablecoin may remind some of the crashed TerraUSD stablecoin, there are some specific differences. First, TerraUSD is a purely algorithmic stablecoin that relies on an arbitrage system and its own partner token, LUNA. Hope, on the other hand, will leverage some elements of CeFi.
Some prominent investors have voiced support for stablecoins. Additionally, Yang has allegedly confirmed that he will invest $10 million of his own money to fund the Hope ecosystem.
At the same time, the first DeFi project built in the Hope ecosystem will be HopeSwap, which will serve as an entry point for users to purchase HOPE on the platform. The exchange protocol, built on the ethereum blockchain, will use an “automated market making” or AMM system and help provide liquidity.
HopeConnect will be next, followed by other applications, including a non-custodial lending platform called HopeLend with multiple liquidity pools, synthetic asset exchange HopeEcho, and other third-party DeFi applications developed on the HOPE ecosystem program.
Babel Finance is the leading cryptocurrency lending platform. It started in China with the support of many prominent China-focused investors, including Sequoia Capital China, Tiger Global and Dragonfly Capital. The company later opened a branch in Singapore, where it is now headquartered.
However, Babel Finance has been hit by market contagion following the catastrophic collapse of the Terra ecosystem last June. The lender subsequently announced its decision to halt withdrawals following similar moves by Celsius Network and Voyager Digital.
Earlier this month, Bloomberg reported that Babel Finance was working on a new plan to raise funds through a cryptocurrency-backed stablecoin. At the time, the media said the new stablecoin being proposed was called Babel Recovery Coin.
Commenting on the report, Yang said Hope would be owned by Babel but would not directly repay creditors. Instead, creditors will receive Babel Recovery Coin (BRC).
According to Yang, the team behind Hope is made up of ex-Babel employees who will receive 30% of the leveraged tokens (LT) with a four-year cashout timeline. The team will lock up all their LT in a voting escrow token (veLT) to govern Hope’s Decentralized Autonomous Organization (DAO).
Source of information: Compiled from CRYPTONEWS by 0x Information.Copyright belongs to the author, without permission, may not be reproduced