Stable coins are considered the little bit of security on the fluctuating crypto market. With the establishment of a stability fund for their own stable coin, the Equilibrum platform takes the security concept to the next level.
The Equilibrium platform has launched the world’s first crypto stability fund. The fund is designed to protect users of the platform against the volatility of the market. It is valued at $ 17.5 million and initially serves to hedge the platform’s stable coin EOSDT.
Equilibrium itself has been around since April 2019. Users have the opportunity to purchase stable coins or to create their own stable crypto assets. In return, the platform requires hedging in the form of liquid cryptocurrencies.
The EOSDT token based on the EOS blockchain plays a special role here. The stable coin, which is pegged to the US dollar, acts as the base currency of the platform. As such, the coin is secured by digital customer assets worth $ 12.5 million. As Equilibrium CEO Alex Melikhov makes clear, the additional establishment of the fund is also a testament to the developers’ confidence in their own currency:
“As confirmation of our commitment to EOSDT, we have set up the Stability Fund with our own assets. This fund offers additional protection and coordinates our interests with our customers – we also take a risk!”
Equilibrium Stability Fund runs through Smart Contract
The stability fund launched by Equilibrium is structured in the form of smart contracts. It comprises 6.5 million EOS (about $ 17.5 million). The contracts are programmed in such a way that they are automatically triggered in the event of market fluctuations. If it should happen that EOSDT is not adequately secured with assets, the algorithm ensures that EOSDT holders are automatically compensated.
The US Federal Deposit Insurance Cooperation (FDIC) is the inspiration for the fund. Founded in the 1930s, this fund acts as a kind of insurance for bank customers’ deposits. Similar to the FDIC, Equilibrium’s stability fund should therefore guarantee additional customer confidence.
Equilibrium had the smart contracts checked by an independent audit company. The company hopes that its own fund will send a signal to the industry.