OpenDAO's Stablecoin Will Use UMA for Collateral Like Real Estate and Stocks!

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Software developer, amateur historian and writer, and crypto enthusiast living on a farm.

3 years ago

In community: Cryptocurrency and Blockchain(7b7f)

OpenDAO has been running for months to test the Open Market and first iterations of the Cashbox system for providing liquidity to various real-world assets. The goal has always been to build a solid, more inflation-proof stablecoin with various kinds of collateral backing it. Previously, they had planned to fork Synthetix, but this would've required OpenDAO to deploy smart contracts for the mintr, adding more potential risk for investors.

Building the Synthetix fork would also put phase 2 of the project back by quite a bit to allow time for coding, testing, and security audits. As the DeFi space accelerates, OpenDAO wants to be aboard the train and not sitting on the sidelines! A new collaborative effort with UMA has moved the project forward substantially, and the team is working to finish the integration.

So, what does this mean?

UMA is a platform / set of protocols that provides a backbone for synthetic assets, a kind of blockchain token which does the work of representing another asset and holding true to its value. DAI is an example of a synthetic asset. It maintains the value of roughly one US dollar by manipulating over-leveraged Ethereum.

With the help of UMA protocols, OpenDAO will be able to build support for different kinds of synthetic assets. Wrapped BTC, ETH, and LTC along with real-world assets like tokenized shares and real estate can be locked to mint the stablecoin. You can lend stablecoins to provide the counter-weight for collateral added to the market, earning interest from a variety of productive assets!

The stablecoin with a strong collateral base and utility in the OpenDAO marketplace will make a great environment for large investment. Unlocking markets for average people which are traditionally reserved for the wealthy to make them richer.

If you want to beat inflation and avoid common risks of DeFi like rug pulls, this is an amazing project to look into!

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