- Ergo provides a decentralized, crypto-backed, algorithmic stablecoin.
- SigmaUSD protocol (SigUSD) is a decentralized crypto-backed, algorithmic stablecoin.
- SigUSD has a crypto reserve that protects its value.
Next-generation smart contract platform Ergo provides a stablecoin solution amid the crashing market where stablecoins play a major role. In detail, SigmaUSD protocol (SigUSD) is a decentralized crypto-backed, algorithmic stablecoin. It is entirely on-chain and non-custodial, a factor that eliminates trust issues and backdoor manipulations.
Furthermore, SigUSD has a crypto reserve that protects its value. It has two funding sources: the users trading ERG for SigUSD and the people trading ERG for the reserve token. This pool of ERG works to over-collateralize the stable asset, SigUSD, and absorb ERG’s volatility.
Specifically, it is collateralized by several hundred percent, and the holders of the token can clearly see the reserve ratio to understand the risk of holding it. This way, users and investors can be sure that the value of SigUSD is maintained in circulation.
The technology that the SigUSD possesses builds confidence and eliminates the fear of financiers investing in stablecoins. The recent event in the LUNA network that involved the nosedive of the two famous tokens, LUNA and UST, shattered the space. Hence, spreading FUD among crypto assets, particularly in stablecoins. The Ergo network with SigmaUSD protocol aims to change this trend.
On the other hand, there are many stablecoins in the market aside from SigUSD. The BUSD, USDC and USDT are some of the examples of stablecoins in the market. Hence, it is up to the investors and traders to choose what is best for them despite the technology behind these cryptos.
Moreover, the crypto space is prone to market volatility and wild swings. Therefore, it is recommended that investors and users do their own research prior to engaging in crypto assets.