EurPlus (EURP): The Remedy to Issues with Fiat, Crypto, and Non- Collateralized Stablecoins
The question on everybody’s mind today is - is it true that stablecoins are truly stable? Regulators all around the world are worried about the rapid expansion of tokenized money, particularly stablecoins. More so, because of its potential to disintermediate conventional financial institutions, causing volatility and financial instability.
To answer that question, let’s first understand what stablecoins truly are. We’ll then deep dive into issues(if any) arising from utilizing stablecoins and how EurPlus(EURP) is addressing those. So, let’s get started!
What Exactly are Stablecoins?
Stablecoins are blockchain-based cryptocurrencies, backed by secure reserves. Unlike Bitcoin and other prominent cryptocurrencies, which are noted for their extreme volatility, stablecoins are known for their stability.
Some key takeaways include:
Stablecoins are tokens that are tied to a national currency, such as the US dollar. It can also be tied to the price of a commodity, such as gold.
The price stability of stablecoins is achieved by collateralization (backing) or algorithmic procedures.
As of now, most stablecoins are pegged to USDT. In the midst of all this, there is a new name set to join the race for stablecoin superiority. EurPlus, with its native currency EURP, is pegged to the EURO. It’s based on Ethereum and serves as the backbone for user transfers and other dapp services like transactions, lending, and insurance. In order words, it is a direct competition to other stablecoins that are pegged to the USDT.
Issues with Fiat, Crypto, and Non-Collateralized Stablecoins
Stablecoins, as their name implies, are supposed to have a value that is (relatively) steady in comparison to the underlying commodities. Many stablecoins are pegged at a 1:1 ratio. Meaning 1 EurPlus is equivalent to 1 Euro.
Stablecoins may be classified into four categories according to their design: fiat-collateralized, crypto-collateralized, commodity-collateralized, and algorithmic or non-collateralized.
Although stablecoins have the potential to increase the efficiency of financial services provision, they come with many issues. Stablecoins may put financial stability at risk, particularly if they become widely adopted. In doing so, stablecoins might be more harmful than they appear to be. Asset contagion, collateral, and accountability are all possible problems with stablecoins. Therefore, we shouldn’t overlook the potential for stablecoins to bring systemic dangers to the financial system, eroding national currencies. So, is there are a solution? Well, there actually is — in the form of EurPlus(EURP).
EurPlus(EURP) Giving a New Angle
EurPlus(EURP) is made up of a series of Ethereum contracts. Its operational mechanism differs from that of all other stablecoins in several ways. EURP, like Dai, is pinned by the underlying value of cryptocurrencies from the standpoint of collateralized kinds. The working logic, on the other hand, is rather different. The user secures a particular quantity of Dai loans by collateralizing a series of cryptocurrencies in the MakerDai system, then loans Dai. And the Dai that the user mortgages is kept as a value reserve in the MakerDai system.
The user retains ownership of the mortgaged tokens and may reclaim the over-collateralized cryptocurrency at any moment by returning the borrowed DAI plus the interest. Cryptocurrency is likewise supported in EURP, however, the implementation rationale differs slightly from that of Dai.
Why Choose Another Pegged Stablecoin?
Instead of using the US dollar as an anchor, EurPlus(EURP) picked the Euro, and here’s why. USD stablecoins make up the great bulk of existing stablecoins. This is due to the fact that stablecoins were first used in centralized cryptocurrency exchanges. The majority of bitcoin transactions are in US dollars.
Stablecoins, on the other hand, have an increasing number of applications at any time. We believe there will be more and more use cases for stablecoins anchored on the Euro. The reason behind is because it is the second biggest fiat currency used by hundreds of millions of people. As a result, the Euro has been chosen as the anchor.
With EurPlus(EURP), you get unmatched benefits. There is no censorship, real-time ETH and EURP values are published, anonymity and much more.
Europe is presently evaluating the comments received during the public consultation period for its proposed Market in Crypto-Assets Regulation (MICA), which was released in September of last year.
MICA is particularly interested in the laws that govern stablecoins. Especially those with the potential to become generally recognized and systemic, as well as crypto asset providers such as exchanges. The goal is to create a comprehensive and clear regulatory framework and a unified set of laws that will protect investors, promote transparency, and ensure a high level of governance while allowing the digital asset ecosystem to thrive.
In conclusion, EurPlus(EURP) has been innovated in many respects as a new cryptocurrency-collateralized stablecoin and has overcome the challenges that the present stablecoin market presents. If you're considering stablecoins as a long-term investment, EurPlus(EURP) is unquestionably 'THE' stablecoin to consider. Visit our website to learn more about us, or follow us on Twitter to keep up with the latest breaking news!