TLDR
- Tether has launched a new synthetic stablecoin called Alloy (aUSDT), backed by its gold-backed token XAUT
- Alloy is an open platform that allows users to create collateralized synthetic digital assets
- aUSDT is designed to track the value of the US dollar while being overcollateralized by XAUT tokens
- Alloy and aUSDT are the first steps in Tether’s planned tokenization platform for real-world assets
- Tether aims to provide aUSDT for payments and transactions while allowing holders to maintain gold exposure
Tether, the company behind the largest stablecoin USDT, has unveiled a new category of digital assets called “tethered assets.”
The first offering in this new line is a synthetic stablecoin named Alloy (aUSDT). This new token is designed to track the value of the US dollar, but it is overcollateralized by Tether’s gold-backed token XAUT.
XAUT represents ownership of physical gold stored in vaults in Switzerland. By using XAUT as collateral, users can mint new aUSDT tokens through a smart contract on the Alloy platform.
However, there is a limit – the value of minted aUSDT cannot exceed 75% of the value of the XAUT collateral.
The introduction of aUSDT provides an innovative solution for crypto users who want to retain exposure to gold while using a dollar-pegged asset for everyday transactions and payments.
aUSDT, the first Tethered asset, just launched!
aUSDT is a synthetic dollar over-collateralised by XAUt (Tether Gold).Alloy by Tether is an open platform that allows to create collateralised synthetic digital assets and will soon be part of the new @Tether_to digital assets… https://t.co/J8JyWt9duh
— Paolo Ardoino 🤖🍐 (@paoloardoino) June 17, 2024
Instead of selling their XAUT holdings, they can essentially take out an overcollateralized loan in the form of aUSDT.
Alloy and aUSDT represent Tether’s initial foray into a broader initiative – creating a platform for tokenizing real-world assets.
Tether has stated that Alloy will eventually become part of this larger tokenization venture launching later in 2024. Other potential offerings could include yield-bearing products and tokens representing different asset classes.
The issuance of aUSDT is being handled by Tether subsidiaries Moon Gold NA and Moon Gold El Salvador, which are regulated entities under El Salvador’s National Commission of Digital Assets.
While not the first synthetic dollar token, aUSDT is a significant move from Tether given the company’s size and influence in the stablecoin market. USDT has a circulating market cap over $100 billion, dwarfing other mainstream stablecoins.
Some analysts view Tether’s centralized model as giving it an advantage in terms of liquidity and decision-making compared to decentralized synthetic dollar projects.
Tether’s expansion into asset tokenization aligns with the company’s broader ambitions that now extend well beyond just issuing its flagship USDT stablecoin.
