Bitfinex Introduces aUSDT: A Gold-Backed Digital Asset

Bitfinex
has
announced
the
launch
of
aUSDT,
a
new
“tethered”
digital
asset
that
merges
the
stability
of
gold
with
the
functionalities
of
a
Web3-based
digital
asset,
according
to

blog.bitfinex.com.
The
innovative
token
is
backed
by
Tether
Gold
(XAUt),
representing
ownership
of
physical
gold
stored
in
Switzerland.

A
New
Kind
of
Tethered
Digital
Asset

The
aUSDT
token
is
designed
to
maintain
a
stable
value
by
tracking
the
US
Dollar
through
mechanisms
such
as
over-collateralization
and
secondary
market
liquidity
pools.
Users
can
mint
aUSDT
by
depositing
XAUt
into
Ethereum-compatible
smart
contracts,
which
automate
and
secure
the
collateral
management
process.

Over-collateralization
ensures
that
more
value
is
held
as
collateral
than
the
value
of
the
issued
assets,
providing
a
safety
net
against
market
fluctuations.
This
system
helps
preserve
the
stability
and
reliability
of
the
minted
aUSDT,
combining
gold’s
historical
value
preservation
with
modern
digital
asset
technology.

How
aUSDT
Works

aUSDT
operates
through
a
sophisticated
system
managed
by
MoonGold
El
Salvador,
S.A.
de
C.V.,
and
MoonGold
NA,
S.A.
de
C.V.
Users
start
by
depositing
Tether
Gold
(XAUt)
tokens
into
a
smart
contract.
This
forms
the
basis
for
creating
the
Tethered
Asset,
aUSDT,
which
is
pegged
to
the
US
Dollar.
The
system
requires
that
more
value
in
XAUt
be
deposited
than
the
amount
of
aUSDT
minted,
with
a
maximum
collateralization
ratio
of
75%.

The
smart
contracts,
written
in
Solidity,
manage
the
entire
process
from
collateral
deposit
to
minting
and
returning
aUSDT.
They
ensure
automated,
transparent,
and
secure
execution
of
transactions.
These
contracts
store
user
collateral,
track
the
minted
and
returned
aUSDT,
and
manage
the
collateralized
minted
positions
(CMPs)
of
each
user.

The
system
uses
a
price
oracle
to
determine
the
value
of
XAUt.
This
oracle
provides
real-time
pricing
data,
allowing
for
arbitrage
opportunities
that
help
maintain
the
price
stability
of
aUSDT.

Ensuring
Stability

If
the
value
of
the
collateral
drops
and
the
CMP
exceeds
a
set
liquidation
point
(75%
Mint-To-Value),
the
position
becomes
eligible
for
liquidation.
Specialised
actors
called
liquidators
can
step
in
to
buy
the
collateral
at
a
discount,
restoring
the
collateralization
ratio
and
maintaining
the
system’s
stability.

The
use
of
Ethereum’s
blockchain
technology
ensures
that
all
transactions
are
secure,
transparent,
and
immutable.
This
high
level
of
transparency
and
trust
in
the
system
makes
aUSDT
a
reliable
digital
asset
that
mitigates
market
volatility
risks.

The
Need
for
a
New
Safe
Haven
Asset

aUSDT
offers
a
stable
and
reliable
digital
asset
solution
by
leveraging
Tether
Gold
(XAUt)
to
mint
aUSDT.
This
system
is
designed
to
maintain
price
stability
and
provide
a
dependable
store
of
value,
particularly
useful
for
users
seeking
a
stable
digital
currency
for
various
financial
activities.

By
combining
the
enduring
value
of
gold
with
modern
digital
asset
technology,
aUSDT
provides
a
stable
and
versatile
digital
asset.
Users
can
leverage
aUSDT
for
everyday
payments
and
transactions,
benefiting
from
its
stability
and
the
ease
of
pricing
and
conversion
due
to
its
peg
to
the
US
Dollar.

In
periods
of
economic
uncertainty
and
market
volatility,
aUSDT
aims
to
serve
as
a
reliable
store
of
value.
Arbitrage
traders
can
take
advantage
of
price
discrepancies
in
aUSDT,
contributing
to
its
price
stability.

For
users
holding
XAUt
as
collateral,
aUSDT
offers
efficient
collateral
management
and
liquidity
options.
This
seamless
integration
of
gold-backed
stability
with
digital
currency
functionality
makes
aUSDT
a
powerful
tool
for
users.

Image
source:
Shutterstock