Why Relay is the Tether killer
The Relay Stablecoin System token sale public round has begun! Be a part of the private stablecoin for everyday use.
Stablecoins are cryptocurrencies with value tied to a real-world fiat currency, typically the US dollar. As the most used and best known of all stablecoins, Tether (USDT) is the fiat substitute trading pair on the majority of cryptocurrencies exchanges that cannot offer direct fiat services.
Clearly, Tether and similar projects such as DAI or TrueUSD serve a critical purpose in the cryptocurrency ecosystem — as a stable store of value, they give investors and traders the ability to safely sell their assets into a non-volatile holding without needing to go through the difficulty of exiting to fiat. However, these stablecoins all suffer from a number of issues that make them less than ideal for wide usage, but users have had no choice but to use them anyways due to how valuable of a service they provide.
Until Relay. First, a quick visual comparison of the Relay Dollar (XRD) versus major alternative stablecoins:
Now let’s discuss each point in more detail:
Private
This is an important enough point that it will be covered at length in a separate article, but in short the Relay Dollar is private, which is not a feature offered by any other stablecoin. Right now, digital currencies are not ideal for cash-like applications because all transactions are entirely public, so any stranger can see your precise spending habits and funds. This transparency is simply not needed and even detrimental for a cryptocurrency that is to be used as a real currency, so XRD has fully private transactions to reclaim this fundamental characteristic of a successful currency.
A non-private stablecoin such as USDT, TUSD, or DAI will never see mass adoption due to the inability to hide one’s daily life from prying eyes, and they are only useful as trading pairs on cryptocurrency exchanges. Only the Relay dollar has the potential to be used as a real digital currency.
On-chain collateral
USDT, TrueUSD, and other fiat-backed coins have value because $1 is stored in a bank account somewhere that is supposedly redeemable for $1 in USDT or TrueUSD. This is not ideal because users have to trust that this fiat backing is available, which has historically caused great controversy for USDT in particular.
A decentralized on-chain collateral model through the Relay Token (XRL) backing the Relay Dollar (XRD) eliminates the need to trust a centralized institution that holds fiat currency to back the stablecoin. The public Relay DAO holds XRL that provides fully on-chain collateral, so anyone can see at any time exactly how much value backs up the XRD in circulation. Furthermore, increasing demand for the Relay Dollar drives up the value of the collateral Relay Tokens and results in additional Relay Dollars being printed into circulation, all without the intervention of a centralized authority, so the system can sustainably scale to meet demand.
Decentralized supply
The inability to print new stablecoins without depositing USD collateral greatly limits the ability of fiat-backed coins like USDT to rapidly adjust supply in response to demand, which means it is very difficult to imagine them being used on a large scale. Fiat-backed coins are fundamentally unable to replace traditional currencies due to their need to be backed by them, whereas crypto-backed models such as DAI or XRD are substantially more independent in nature. Additionally, by using a dedicated collateral token instead of a general-purpose cryptocurrency such as ETH (as DAI does), the Relay Dollar is significantly more protected from external price shocks such as a decrease in ETH value that can harm the stablecoin’s system through no fault of its own.
As mentioned above, using cryptocurrency collateral (the Relay Token, or XRT) to provide backing for the Relay Dollar allows supply to be immediately responsive to increased demand, unlike opaque systems such as Tether that print new tokens in response to unknown needs. Where USDT and other centralized stablecoins are exposed to market manipulation accusations and other controversies, the decentralized supply control mechanism of the Relay Dollar ensures full trustworthiness at all times.
About Relay:
The Relay Stablecoin System is a private cryptocurrency with stable value pegged to the US dollar, secured by a public collateral token. Public round of up to 2000 ETH / 75% of total supply begins September 15.
