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Knowledge

Is stablecoin flexUSD really setting the new gold standard?

June 3, 2022 - Around 4 mins mins to read

How do stablecoins satisfy the trio? Does FlexUSD satisfy all three factors: stability, transparency, and returnability? Let’s find out through the following article.

What is FlexUSD?

flexUSD

This is a stablecoin pegged to the US dollar. It is unique among stablecoins in that it automatically pays interest to its owners. Interest rates vary but are typically as high as 20% APY.

This stablecoin is collateralized with USDC. USDC itself is also one of the most popular stablecoins globally due to its greater compliance and compliance with US regulators, giving USDC holders much more confidence that it is regulated. 1:1 support in “real” US dollars.

Why not hold USDC instead of flexUSD? The main reason is that you can earn automatic compound interest by having flexUSD. In addition, you can use flexUSD as collateral to trade on exchanges, meaning you can make a profit and trade simultaneously.

Conversely, to earn interest on USDC and other stablecoins, you will need to actively put them to work by lending them directly to a third-party platform, using them as collateral to trade the assets derivative products, or deploying them in smart contracts of DeFi protocols.

What do sustainable stablecoin yields have to do with crypto derivatives?

CoinFLEX is the first crypto exchange for creating a peer-to-peer repo (borrow and lend) marketplace, connecting dollar lenders (repo buyers) with crypto collateral borrowers (repo sellers).

Repo merchants receive USDC for their coins and maintain their crypto exposure through a distributable long-term futures term.

Repo market participants include junior traders (analyzing or speculating on arbitrage between perpetual and spot futures), lenders, borrowers, and arbitrageurs cross swap.

Many of these crypto operations are challenging manual management. CoinFLEX created flexUSD to tokenize these market opportunities.

flexUSD takes advantage of the massive demand for institutional leverage and the scarcity of dollars in the crypto market by earning funding rates from traders on the CoinFLEX exchange.

flexUSD pays this interest to on-chain holders every 8 hours. It is important to note that since flexUSD derives this profit directly from the CoinFLEX futures market and not a third-party intermediary, the stablecoin earns a transparent and sustainable return for its holders.

Stablecoin’s set of 3 standards are met?

It would be helpful to have a framework for assessing the resilience of stablecoins, explicitly focusing on the following attributes: stability, transparency, and return.

flexUSD

Stability: What are the risks of being dependent on stablecoins?

flexUSD is backed by USDC and coin assets in CoinFLEX’s repo market. Since repo trading involves opposing coin and futures positions, flexUSD’s balance sheet is always fully hedged and unconcerned with the underlying price movements of the crypto market.

Transparency: How can you verify backing collateral reserves for stablecoins?

FlexUSD’s collateral reserve is expected to be verified and publicly endorsed by a leading US audit firm every day, every 8 hours.

Owners have full transparency on how flexUSD generates profits: on CoinFLEX, a publicly viewable marketplace based on an order book that any qualified customer can view and trade. With other for-profit products, you often have to listen to borrowers about what the money is being used for, and there is no visibility into what is being bought and invested with your money.

Liquidity – What are the liquidity risks of stablecoins, especially during times of market stress?

In the history of this stablecoin, CoinFLEX has successfully processed $1 worth of the underlying asset (USDC) per flexUSD swap.

With flexUSD, it can be said that CoinFLEX is pioneering the gold standard for stablecoins.

Stablecoins were born out of utility – the need for a reliable and low-cost tool used as a medium of exchange for global, peer-to-peer commerce. However, the UST crash has led to doubts about the future viability of stablecoins. This demise results from innovation on stablecoin utility – extending beyond payments for trading and making profits. But the collapse of the UST doesn’t mean stablecoins shouldn’t exist for profit. Therefore, before investing, you need to focus on learning about the three essential properties of stablecoins, observe and make a thorough assessment.

About flexUSD, do you have the same comment as me?

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

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Coincu News

Knowledge

Is stablecoin flexUSD really setting the new gold standard?

How do stablecoins satisfy the trio? Does FlexUSD satisfy all three factors: stability, transparency, and returnability? Let’s find out through the following article.

What is FlexUSD?

flexUSD

This is a stablecoin pegged to the US dollar. It is unique among stablecoins in that it automatically pays interest to its owners. Interest rates vary but are typically as high as 20% APY.

This stablecoin is collateralized with USDC. USDC itself is also one of the most popular stablecoins globally due to its greater compliance and compliance with US regulators, giving USDC holders much more confidence that it is regulated. 1:1 support in “real” US dollars.

Why not hold USDC instead of flexUSD? The main reason is that you can earn automatic compound interest by having flexUSD. In addition, you can use flexUSD as collateral to trade on exchanges, meaning you can make a profit and trade simultaneously.

Conversely, to earn interest on USDC and other stablecoins, you will need to actively put them to work by lending them directly to a third-party platform, using them as collateral to trade the assets derivative products, or deploying them in smart contracts of DeFi protocols.

What do sustainable stablecoin yields have to do with crypto derivatives?

CoinFLEX is the first crypto exchange for creating a peer-to-peer repo (borrow and lend) marketplace, connecting dollar lenders (repo buyers) with crypto collateral borrowers (repo sellers).

Repo merchants receive USDC for their coins and maintain their crypto exposure through a distributable long-term futures term.

Repo market participants include junior traders (analyzing or speculating on arbitrage between perpetual and spot futures), lenders, borrowers, and arbitrageurs cross swap.

Many of these crypto operations are challenging manual management. CoinFLEX created flexUSD to tokenize these market opportunities.

flexUSD takes advantage of the massive demand for institutional leverage and the scarcity of dollars in the crypto market by earning funding rates from traders on the CoinFLEX exchange.

flexUSD pays this interest to on-chain holders every 8 hours. It is important to note that since flexUSD derives this profit directly from the CoinFLEX futures market and not a third-party intermediary, the stablecoin earns a transparent and sustainable return for its holders.

Stablecoin’s set of 3 standards are met?

It would be helpful to have a framework for assessing the resilience of stablecoins, explicitly focusing on the following attributes: stability, transparency, and return.

flexUSD

Stability: What are the risks of being dependent on stablecoins?

flexUSD is backed by USDC and coin assets in CoinFLEX’s repo market. Since repo trading involves opposing coin and futures positions, flexUSD’s balance sheet is always fully hedged and unconcerned with the underlying price movements of the crypto market.

Transparency: How can you verify backing collateral reserves for stablecoins?

FlexUSD’s collateral reserve is expected to be verified and publicly endorsed by a leading US audit firm every day, every 8 hours.

Owners have full transparency on how flexUSD generates profits: on CoinFLEX, a publicly viewable marketplace based on an order book that any qualified customer can view and trade. With other for-profit products, you often have to listen to borrowers about what the money is being used for, and there is no visibility into what is being bought and invested with your money.

Liquidity – What are the liquidity risks of stablecoins, especially during times of market stress?

In the history of this stablecoin, CoinFLEX has successfully processed $1 worth of the underlying asset (USDC) per flexUSD swap.

With flexUSD, it can be said that CoinFLEX is pioneering the gold standard for stablecoins.

Stablecoins were born out of utility – the need for a reliable and low-cost tool used as a medium of exchange for global, peer-to-peer commerce. However, the UST crash has led to doubts about the future viability of stablecoins. This demise results from innovation on stablecoin utility – extending beyond payments for trading and making profits. But the collapse of the UST doesn’t mean stablecoins shouldn’t exist for profit. Therefore, before investing, you need to focus on learning about the three essential properties of stablecoins, observe and make a thorough assessment.

About flexUSD, do you have the same comment as me?

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Foxy

Coincu News

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