What is Depos and why we build it
Cryptocurrencies is a big promise for modern economy and money, but high volatility in major cryptocurrencies limits their use in real economy transactions such as business payments, savings or loans. Creating coins stable in value (stablecoins) is the answer for this issue. Stablecoins are highly demanded by the market and fast growth of leaders as well as large number of new projects coming to the market is the best evidence of this demand.
At the same time, most of leading stablecoin solutions use fiat money as the collateral and instrument to provide stability, they use traditional banks and financial infrastructure adding blockchain on the top of it. Though such approach is easy to implement and scale, in our view, it loses main advantages of cryptocurrencies which is decentralized control, censorship resistance and improved privacy.
We also see a handful of projects which try to create stable cryptocurrencies avoiding any dependance on traditional banking system, providing collateral in decentralized assets and using different stabilization mechanisms. While some of these approaches have already shown that they really work, they still struggle scalability issues and often miss an aspect of economic viability for stablecoin holders or creators.
Depos team believes that we can implement traditional banking model proven over time to digital assets in order to separate stability (for stablecoin holders) from risky profit making (for shareholders). Any traditional bank creates its capital from shareholder contributions and tranforms credit and other market risks to profits for shareholders and, at the same time, to guarantees and valuable services for clients holding accounts with this bank.
This is what we do in Depos adding to it new blockchain phylosophy: only digital assets, decentralized control and governance, full transparency of assets and risks for everyone.
We start from our first product, USD-pegged stablecoin D.USD, which is fully collateralized by high-quality bonds tokenized on EOS blockchain.
As any other bank, we create reserve capital, which protects D.USD holders from credit and other risks, and also use liquid cryptocurrency (EOS tokens) to create liquidity pool, which enables easy minting and redemption of D.USD for EOS directly from your on-chain wallet.
