OpenDAO icon connecting banks and invoices and crypto through their stablecoin

How OpenDAO plans to make a strong stablecoin

By lucasc | Crypto Thoughts | 3 Dec 2020

The OpenDAO team recognizes weakness in the current lineup of stablecoins. None of them really meet the requirements for a large-scale exchange of value like regular fiat money. When you hold a US Dollar, you generally know it will be useful. The United States government has armies and networks of bureaucracy backing their dollar. They tell you it's valuable, and they accept it for taxes, so it has value. A dollar can be exchanged in everyday transactions to other people.

A stablecoin is an on-chain asset based, algorithmically or physically, on a valuable asset. USDT, for example, is kept at the price of $1.00 by magic, similar to the belief in Santa, and USDC has a 1-to-1 relation with actual US Dollars. DAI is a different brand of stablecoin, pegged to the US Dollar by a complicated algorithm and backed by collateral, mostly ethereum. MakerDAO has started work to integrate other types of collateral on their network to back DAI, but their market share has been decreasing due to their inability to hold stable value. 

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OpenDAO: Bridging real world assets to Defi

The OpenDAO stablecoin, tentatively named $USDO, will be built into the already-functioning Cashbox System (Click This to read about Cashboxes) and Open Market Protocol, so it will be used for and backed by a growing selection of assets. As more kinds of collateral are added, it will be increasingly diverse and strong backing for a stablecoin. 

When liquidity is locked into a market between the OpenDAO stablecoin and a tokenized stock or real estate fund, it essentially confirms that stablecoin being valuable in relation to real markets. The incentives and stable growth of real-world markets can entice larger groups to prefer $USDO to competitor stablecoins. 

Read More!

"OpenDAO Bridges Gap Between Real-World Assets and DeFi" by Me

"Road to Productive Asset backed money" by OpenDAO Team

"What are OpenDAO cash boxes for?" by Me


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