Cardano, a third-generation cryptocurrency and smart contract platform and the home to altcoin ADA ended 2019 with the launch of its Shelley testnet, which went live on December 13, 2019. The upgrade enabled the network to boast more than 500 staking pools.
The CEO of Cardano, Charles Hoskinson, has previously expressed his delight over the upcoming developments that Shelley promises to incorporate into the Cardano ecosystem come 2020. Hoskinson has always been involved in the progress as Cardano blockchain gets ready for significant transformation in the coming year. He had said:
“Moving the chains slowly. 2020 is our year. Smart contracts, scalability, decentralization, high assurance, governance. Time to make a dent in the universe.”
A Cardano variant of DAI
Now, a tweet from the CEO states that he is considering launching a decentralized stablecoin similar to MakeDAO’s DAI.
Dai was created by MakerDAO, to allow borrowing or generating the stablecoin by staking their cryptocurrency holdings as collateral. Dai is not supported with bank accounts of reserve currencies but is generated by putting Ether into the collateralized debt positions (CDP) smart contract.
On February 12, the Weiss rating agency noted Hoskinson’s plan in a tweet, further stating that DAI is a truly decentralized stablecoin and that there should be more projects like these. The tweet read:
“We hear that@IOHK_Charles wants to build a version of DAI on Cardano. So far, #DAI is the only trustless #stablecoin in #crypto world, but there should be more. Stablecoins like DAI have no central point of failure, which is a BIG advantage over the likes of #USDT or #USDC.”
Hoskinson responded to the tweet portraying his confidence about his idea of a stablecoin, claiming that the said cryptocurrency “will blow everyone out of the water.” Adding to this, he mentioned that he has been considering the idea of developing a stablecoin for seven years.
When asked by a community member what benefit Cardano would derive from developing a Stablecoin similar to Ethereum’s DAI, Hoskinson replied that the creation of a DAI-like Stablecoin could significantly affect the value of ADA.
“If the coin uses Ada as part of its Central Bank mechanism, it creates demand for the underlying asset.”
If Cardano does introduce a decentralized Stablecoin, it could definitely boost demand for ADA which would have a positive long-term impact on the price. However, it should be taken into consideration that the stablecoin from Cardano would be a long way from development considering the fact that Cardano itself has three phases to complete before launch.
Cardano’s ADA is quite a popular token among investors and an alternative to Ethereum and EOS among developers. The Shelley era is supposed to make Cardano the most decentralized project in the cryptocurrency space. In fact, Weiss Crypto Ratings named ADA one of the most undervalued cryptocurrencies because of the project’s underlying fundamentals, with the Shelley era showing potential to outperform its older and more established PoS competitors such as EOS and Tron.