Why will stablecoins become an important part of the open financial platform constructed by Coinversation?

Our previous article on Coinversation Protocol have focused on synthetic asset issuance and decentralized contract exchanges. The potential of Coinversation is far more than that. It encompasses a broader DeFi world.

Today we will talk about the stable currency in Coinversation and mortgage lending based on this stable currency.

Coinversation Protocol can be an open financial platform that integrates stable currency, synthetic asset issuance, mortgage lending, decentralized contract exchange, and Polkadot transfer bridge. The stable currency is a very important part and will become a key infrastructure in the Polkadot ecology.

For example, Synthetix, the leading synthetic asset platform in the DeFi world, has issued hundreds of millions of dollars in “Synths” synthetic assets. The most important of these is sUSD, the stable currency under its platform, which has a market value of 100 million U.S. dollars.

The stable currency created by Coinversation Protocol is decentralized, multi-asset staked, supports cross-chain, and supports real-world asset access through a transfer bridge. The user generates the synthetic asset cUSD through the staking, and its currency value is always equal at $1.

The most different part between it and the previously decentralized stablecoins is that they do not need to pay stability fees or interest. It is issued in the model of a synthetic asset collateral pool.

Therefore, the relative increase of all synthetic assets in the entire system determines the cost that users pay to generate cUSD through Coinversation’s collateral pool with collateral, rather than artificial regulations like the previously decentralized stablecoins (such as MakerDao’s Dai).

This cost is more market-oriented, and at the same time, it is equivalent to the inflation rate of stablecoins to world assets. The advantage that if users use Coinversation as a mortgage lending platform and borrow cUSD stablecoins through collateral, users do not need to pay interest like traditional platforms. The only cost that users pay for borrowing is the profit or loss determined by the relative increase in synthetic assets.

Benefits:

1. This cost is completely market-oriented rather than artificially regulated.

2. If the proportion of cUSD in synthetic assets is very large, and the proportion of other synthetic assets is small, the impact of the rise and fall will be very small, and the cost of borrowing by users will tend to zero.

3. If other synthetic assets fall relative to cUSD, borrowing cUSD may make money. That is negative interest rates.

And we can also access alliance chains such as AntChain and FunChain through Coinversation’s transfer bridge to achieve access to various real-world assets.

It will enrich the collateral for this project and the range of assets in the Polkadot ecosystem through cross-chain. Conversely, cUSD can also provide liquidity for real-world assets that we cannot easily cash out. For example, there is a 1 million denomination financial note on the alliance chain, which we cannot use separately.

Once connected to Coinversation, we can borrow cUSD with this as collateral, and the cUSD borrowed can be used and circulated in any denomination.

In short, Coinversation’s stable currency cUSD and Coinversation’s synthetic assets, decentralized contract exchanges, together constitute a complete DeFi system in the Polkadot cross-chain system, which can meet the various needs of users for DeFi.

About Coinversation

Coinversation Protocol is a synthetic asset issuance protocol and decentralised contract trading exchange based on the Polkadot contract chain.

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Coinversation Protocol

Coinversation Protocol

Coinversation: Decentralized Synthetic Asset Issuance Platform on Polkadot