Types of Stablecoin and the Function of $CMST

  • Price stability
  • Require reliance on a third party
  • Crypto-backed Stablecoins; Cryptographic assets could be used as collateral if we want to avoid relying on the conventional payment system. Since this is cryptoland, why go back to these outdated banks with their flimsy state-backed currencies? In this instance, the crypto asset ensures stability. These ventures typically use many currencies to spread risk and have excessive collateral to account for market volatility. The ratio of the collateral may be as high as 1:2. However, the stablecoin will be lost if the collateral falls to zero. The over-collateralization required by this strategy, which locks up a significant quantity of cryptocurrency assets, removes the need to rely on a third party, but it is economically inefficient.
  • Can be inexpensively liquidated
  • Less centralized
  • inefficient use of capital (over-collateralization)
  • Non-Collateralized stablecoins; Stablecoins of this type don’t hold any sort of collateral. They rely on smart contracts to adjust the supply of stablecoins in accordance with market demand in order to maintain the value stability.
  • Decentralized
  • Very complex
  • Circle’s USDC. The Centre consortium, which is behind this asset, says USDC is issued by regulated financial institutions.
  • Dai; Dai is a form of collateral-backed currency whose value is fixed to the US dollar and maintained constant through a system of matching financial incentives.
    The Dai token resides on the Ethereum blockchain, and neither its solvency nor its stability are dependent on any trusted third parties. All Dai that are in circulation are created from Maker Vaults and are supported by an abundance of collateral assets.
    Using Dai is similar to using any other cryptocurrency: It is possible to hold it as a safeguard against market instability, send it freely to others, and use it as payment for products and services.
  • Harbor Protocol: The $HARBOR token serves as the Composite forum’s governance token. It can be used to obtain more stablecoin, increasing the circulation of $CMST. The $CMST token’s future advancements are decided using $HARBOR. The Comdex modular chain’s TokenMint module was used to produce the $HARBOR token, which is built on cosmosSDK rather than CW20 so that it can be used by modules like vault, locker, etc.
  • Emergency Shutdown: As a part of extra solvency safeguards, governance can be used to start an emergency shutdown to stop the minting of $CMST with a particular type of collateral asset or a protocol-wide trigger to stop the minting temporarily to prevent further damage.

About Comdex

Comdex is a decentralized synthetics exchange built to democratize finance by reducing the complexities and regulatory hurdles to access investments in financial assets with intrinsic value.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store