BitGo announced plans to launch the USDS stablecoin, which will specifically reward participants who provide liquidation to the ecosystem.
BitGo Moves Into Stablecoins With Reward-Ranked USDS
The TOKEN2049 event is taking place in Singapore, bringing together industry leaders and projects. Throughout the event, many projects have announced new developments and updates, such as Circle announcing the integration of USDC on Sui yesterday, September 17.
Today, September 18, on the TOKEN2049 stage, BitGo Chia its intention to enter the potential stablecoin sector, with the introduction of a stablecoin called USDS.
Specifically, according to CEO Mike Belshe, the USDS stablecoin is different from other competitors by rewarding organizations that provide liquidation to the ecosystem.
USDS is backed by short-term Treasury bonds, overnight loans, and cash, like many other stablecoins on the market. But thanks to the difference of Chia rewards to participants, BitGo calls it the first “open participation” stablecoin.
💸 Introducing $USDS
— BitGo (@BitGo) September 18, 2024
The first open-participation stablecoin to redefine financial freedom.
Built on a foundation of transparency, USDS empowers the community by democratizing the stablecoin experience and putting the power back in your hands.
🏦 1:1 USD Backing: USDS is fully… pic.twitter.com/pfzXWGZ1ze
CEO Mike Belshe Chia :
“The main reason for launching USDS is that, while existing stablecoins have performed well, we still saw an opportunity to create a more open and fair system that fosters innovation and most importantly rewards those who build the network.
The real value of a stablecoin comes from the people who use it, the liquidation they provide, and the accessible venues to trade it.”
It is understood that USDS will pay rewards using profits drawn from its reserve fund.
“At the end of each month, we take a portion of the profits from the cash held in the underlying fund and we transfer it back to the participants proportionally, based on their asset ownership.”
But the model sounds like a dividend-paying company and would therefore likely be classified as an Investment Contract, asthe SEC recently clarified .
But BitGo denies this. Belshe said the difference is that USDS does not distribute the proceeds to end users but to liquidation providers.
Other stablecoins Chia their profits to reward end users, and are thus forced to stay away from the US market.
“Finally, there are stablecoins that are exclusively US-based, while others are non-US-based, like Mountain Protocol or Lift Dollar from Dubai. They cannot be sold in the US because they would be classified as securities.”
Meanwhile, the stablecoin segment is growing rapidly with formidable names such as USDT or USDC. Tether monopolizes 75% of the stablecoin market share , USDT reaches a record balance on exchanges. Meanwhile, Circle has just expanded USDC to its 16th blockchain.
More modest rivals like PayPal’s PYUSD have also recently surpassed the $1 billion Capital mark . And more are joining the growing space.
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