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The crypto world is in desperate need for a truly decentralized, stable coin. But honestly, there really isn't a truly decentralized stable coin out there. Decentralized means many small parties contribute and govern the system, rather than a few larger entities. Tether (for example) can shut off anyone's access at any time. And has done so on numerous occasions. Central Bank Digital Currencies CBDC will have the ability to shut off an individual's funds based on politics, geography, or if they are deemed to be a criminal by their local government. Luckily, nobody ever gets accused of a crime they didn't commit.
Centralization also leads to overt acts of manipulation, like USDC allegedly contacting the SEC about BUSD to "warn" them of issues. Binance has a monthly audit of their reserves for their Binance branded BUSD stablecoin and is the most reputable exchange in crypto. That's precisely the reason they are being attacked by other competitors like Coinbase and FTX. None of this is good for crypto however.
A truly decentralized stable coin would be
- devoid of any human control
- apolitical
- transferable to anyone anywhere for an affordable cost
One new upstart project called DXO (Deflationary Xchange Output) says that they are all of these things and more.
DXO which launched just a few weeks ago after publishing a scathing whitepaper describes itself as the "Bitcoin Standard." It tries to replicate the earliest forms of money in which a blacksmith took gold and Forged it into gold coins. It was impossible to print money because you had to have gold. Bitcoin is a much better "commodity" than gold. There is a limited supply, and it cannot be faked or mixed with lower quality things like gold can. So DXO takes a provable Bitcoin and burns it...forever...to produce DXO. $1000 of BTC is put into the Forge and out comes 1000 DXO coins. It works with any amount up to 50k per day.
But why on Earth would anybody want to do this?
- Bitcoin is great for large transactions. But it doesn't do micro transactions well. You could easily send 1 DXO anywhere for pennies on the BNB chain.
- DXO provides a yield simply by holding it. Now you can turn your Bitcoin into a yield generating asset while still holding coins in your wallet.
- DXO provides opportunities that other stable coins don't because the price is not pegged. It's possible to buy DXO at $1.03 and sell at $1.10 if there is heavy buying pressure. It's a truly remarkable and innovative concept.
In terms of its future benefits, DXO makes Bitcoin green. Bitcoin is a much more efficient system than fiat, but it does use a lot of power. Organizations have called for Bitcoin to reduce its power consumption, which is impossible. That's how the network was designed to be difficult, so no one with a power company in their back pocket could game the system. DXO is however magnitudes more efficient than Bitcoin. So burning Bitcoin into DXO allows all of the processing power that was used to create it to live on for hundreds of years.
In a few weeks, over 100,000 DXO has been Forged. With all those that hold DXO getting a piece of every transaction. According to a Twitter account that keeps track of the value of 1000 DXO, over 3% yield has been generated in less than 3 weeks just by simply holding it in your wallet. Via the project staking page there are also some enticing APRs being offered.
It's important to note that even though this launched on BNB chain DXO is not a Binance sponsored project. The devs, like Satoshi, are completely anonymous. According to the whitepaper this is to prevent fud and is more in line with the way crypto is supposed to be. There is also no "dev" fee attached the project or in the smart contracts. The 0.5% fee on every transaction goes to all the holders based on how much DXO you hold. Unprecedented in crypto. If you'd like to get in early on this potential industry shifting technology, you can find out more at their website and on Twitter.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.