Agora, an institutional-grade US dollar stablecoin issuer, and Mantle, a hub for financial and consumer on-chain applications, have announced the deployment of AUSD, a next-generation stablecoin fully backed by cash, U.S. Treasury bills and overnight repo agreements, on Mantle Network, a modular Ethereum layer-2 (L2) blockchain.
Native fiatcoins enable explosion of real-world applications
Agora’s native deployment brings with it the ability for traditional financial services and payment companies to operate their business on Mantle with a native stablecoin partner.
The stablecoin will tap into the initial on-chain liquidity support from Mantle.
The launch opens the door to several opportunities for users: Bridged stablecoins have a host of limitations including time locks, security risks, and capital inefficiency. Having an institutional-grade, native stablecoin will accelerate the adoption of Mantle by traditional businesses.
Payment companies and exchanges will now be able to natively operate applications on the Mantle stack.
Some anticipated future uses for native AUSD on Mantle include white-labeled stablecoins for exchanges and applications, cross-border payment solutions, and in-game token economies.
AUSD is ready on Mantle with ecosystem-wide composability
AUSD is now supported on Mantle decentralized exchanges (DEXs) such as Merchant Moe, with liquidity pairs against Mantle native assets mETH, cmETH, FBTC, and other stablecoins.
Commenting on the latest development, Nick van Eck, the CEO of Agora said,
“We’re thrilled to be working with the Mantle team and to be joining this vibrant ecosystem. Mantle has an exceptional suite of financial and consumer applications, with many impactful announcements on the way. This is a forward-leaning team and Mantle was the priority for AUSD’s first L2 deployment."
Meanwhile, Jordi Alexander, the Chief Alchemist of Mantle, asserted,
“AUSD incorporates both the best practices of and biggest lessons from older generation stablecoins, and offers a solution that addresses some of the most pernicious issues faced by stablecoins in wider adoption."
The dawn of the stablecoin 3.0 era
AUSD kickstarts the Stablecoin 3.0 Era and offers an open stablecoin model focused on builders and businesses.
Its design addresses 1.0 Era (2014) stablecoin USDT’s opacity around reserves, banking relationships and audits, and differentiates from 2.0 Era (2018) stablecoin USDC’s exchange-backed setup with Coinbase that has led to a growing conflict of interest as the number and breadth of market participants expand.
On the macro front, things seem to be in-tact. The stablecoin ecosystem has been thriving of late. As chalked out in a recent tweet, a total of 76 stablecoin projects have a circulating supply of over $10 million at the moment. Parallelly, with other key launches lined up, the number can be expected to get even better going forward.
Having had the hindsight of the on-chain activity explosion of DeFi, consumer, institutional-grade custodians/prime brokers, wallets, and PayFi, AUSD is built to avoid the conflict of interest inherent to the design of USDC, where it may be benefiting economically from third-party blockchains such as Solana, or custodians such as Fireblocks and Anchorage, while favoring their respective competitors — Base on the blockchain side and Coinbase on the custody side.
Agora, instead, pays for providing services to AUSD, whether they are exchanges, fintech companies, payment providers, or apps. AUSD is conceived as money that is neutral and has no conflicts of interest.
Businesses that drive utility and liquidity to money are integral in the economics of AUSD’s network. Agora uses a G-SIB grade custodian for its reserve fund and institutional asset management of reserves.
Starting today, lending protocols, perps exchanges, and cross-border payment companies on Mantle can all benefit from adopting AUSD, and see an improvement in their economics over prior models.
The revenue generated from AUSD can help expand marketing budgets as well as reduce fees and increase yield rewards for users, or be spent on security and product development, or buying and burning governance token.
The economics of AUSD give power to builders and businesses, and allow for the benefits to be in turn passed on to everyday users. With deep liquidity and high composability from day one, AUSD is expected to achieve economy scale on Mantle through wide adoption.
