Cardano's new stablecoin USDM was launched yesterday, but it is not yet tradable on the crypto market.
Do not confuse it with the USD mars (USDm) token. The USD mars (USDm) token is a stablecoin of his BSC that has been present in the crypto market since the end of 2021 and previously lost its peg to the dollar shortly after its market launch. .
There is also another token called USDM that is related to the Mountain Protocol USD stablecoin, which has nothing to do with Cardano’s USDM.
USDM is Cardano’s new token created by Mehen.
Cardano: ADA crypto network launches new stablecoin USDM
USDM is a USDM stablecoin pegged to the US dollar and collateralized by US dollars held in US-based banks. Its tokens conform to Cardano's standard native token format.
Stablecoins can be freely used within the Cardano blockchain, but to mint or redeem USDM tokens from Mehen, users must be located in an eligible jurisdiction and comply with Know Your Customer (KYC) and Anti-Money Laundering (Know Your Customer) (KYC) and Anti-Money Laundering ( AML) standards.
In fact, Mehen has declared that it will operate within a strong regulatory framework to ensure the rights of token holders.
However, as of now, they cannot yet be used in the cryptocurrency market, nor can they be issued or redeemed on Mehen's official website. A smart contract has just been created.
The goal of the USDM project is to revolutionize decentralized finance on Cardano and enable virtually instant on-chain payments.
Cardano and DeFi
In the DeFi sector, the Cardano blockchain is still barely used in practice.
Although its native cryptocurrency, ADA, has been on the crypto market for about seven years, Cardano is only the 16th TVL in the DeFi sector, compared to newer blockchains like Base (born last year) and It even outperforms little-known blockchains. Blockchains such as PulseChain, Sui, Manta, etc.
Nevertheless, according to Defillama data, Cardano's TVL is currently at an all-time high.
In fact, Cardano was effectively excluded from the first DeFi boom in 2020-2021, and it wasn't until 2022 that it really entered the blockchain scene with significant DeFi dApps.
Moreover, after an initial peak of more than 300 million TVL in March 2022, a virtual crash occurred in January last year to below $50 million.
Sure, the lack of its own stablecoin weighs on it, but so does the fact that the development of DeFi dApps on Cardano is much slower compared to other chains like BSC and Ethereum’s Layer 2. .
With the start of the crypto bull market at the end of 2023, Cardano TV also recovered, recently reaching over $400 million.
Will the price of Cardano (ADA) cryptocurrency be influenced by the launch of new stablecoins?
This dynamic is also reflected in the performance of its native cryptocurrency price, ADA.
In fact, it's still a staggering 78% below its historic peak in September 2021, with the last major bear market only ending in mid-October.
From $3.10 in September 2021, the price fell below $0.25 two years later in October, but has since recovered a bit.
In fact, even though ADA's 2024 price performance is not great, its current price of $0.67 is nearly triple the bear market bottom reached five months ago.
It is only up +14% year-to-date and +6.7% in the past 30 days.
For example, Ethereum is up +56% year-to-date and +29% over the past 30 days.
The current price of ADA is still lower than its price in 2022 before the collapse of the Terra/Luna crypto ecosystem, indicating that Cardano has not yet been able to absorb all the heavy losses from the last major bear market. is clearly shown.
Controversy about Hydra
As for Cardano, there has been some controversy lately regarding his scaling project called Hydra.
Hydra is Layer 2 of Cardano, but the project was considered abandoned. After all, Cardano projects often evolve slowly, so it's not uncommon for their developments to be forgotten by those who don't follow them from within.
Instead, Charles Hoskinson, Cardano's famous co-founder, denied these rumors and said that it was just FUD and that the team had never been so productive and motivated.
In fact, there appear to be no new discussions started in 2024 in the project's official repository on GitHub, with the most recent discussion dating back five months.
Therefore, it is natural to doubt whether the project is actually progressing, even though it is impossible to know for sure from abroad.
The hypothesis is that they prefer another solution for scaling: Hyperledger Firefly.
