Terra’s Implosion Births Crazy Stablecoin Backed by Iced Tea
After TerraUSD (UST) de-pegged from the U.S. dollar, dragging with it billions of investors’ funds, a new stablecoin backed by cans of iced tea has risen like the phoenix.
Satire or not, USDTea, a new stablecoin has joined the gamut of stablecoins in the ecosystem. The stablecoin is backed by America’s leading iced tea brand, AriZona Iced Tea which has sold consistently for $0.99 since 1996.
“We plan to stabilize the troubled cryptocurrency ecosystem by introducing a new token backed by a hard asset that has maintained the same price for over 30 years,” wrote the creators of the stablecoin.
“While other stablecoins attempt to peg to dollar amounts through questionable algorithms or opaque investment strategies, we guarantee our liquidity with sweet, delicious liquid.”
USDTea is an ERC20 token operating on the Ethereum blockchain and was created by a trio of tech artists under the name of Mossy. The founders stated that to maintain fiduciary responsibility, USDTea would commence operations with an initial supply of 1,000 tokens and then steadily increase the reserves.
The operations of the stablecoin are fairly simple as users simply send tokens and a processing fee and will get physical cans of AriZona shipped to them.
Other odd stablecoins
Stablecoins backed by odd assets might begin to proliferate the space in the wake of UST’s de-pegging and tighter regulations. Coadjute announced plans to unveil the world’s first stablecoin backed by mortgages in partnership with R3, a global tech firm.
Typically, stablecoins are backed by a range of assets including fiat currencies, cryptocurrencies, precious metals, and algorithmic functions like UST while others like Tether (USDT) have gone ahead to be backed by U.S. Treasury bills and non-U.S. government bonds.
The controversy around stablecoins and the shroud of mysteries around their backing have fuelled several players to think out of the box to find alternatives.
To mitigate risks, new stablecoins are adopting a hybrid approach by being asset-backed and using an algorithmic model to maintain their peg.
Some stablecoins, like SperaxUSD, utilize a combination of endogenous and exogenous collateral to be a “natively yielding asset” and work by deploying exogenous collateral to a yield aggregator that airdrops accrued interest to holders of the stablecoin.
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