Quick Look at Tether's New Platform Alloy: A New Synthetic Dollar Platform Backed by XAU₮
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Quick Look at Tether's New Platform Alloy: A New Synthetic Dollar Platform Backed by XAU₮
Aiming to provide users with a reliable and versatile cryptocurrency for daily use and asset management.
Navigating Web3 tides with focused insightsBy Nancy, PANews
On June 17, Tether, the world's largest stablecoin issuer, announced the launch of its open platform "Alloy by Tether," enabling the creation of various tethered assets backed by Tether Gold.
According to the official website, Alloy by Tether aims to combine the stability of the U.S. dollar with the security of gold, offering users a reliable and versatile digital currency for daily use and asset management. The platform is developed and managed by Moon Gold NA, SA de CV and Moon Gold El Salvador, SA de CV—both authorized by El Salvador’s CNAD (National Digital Assets Commission) and members of the Tether Group—to serve different customer segments and regulatory requirements.
The platform introduces a new category of digital assets called "tethered assets," which can be backed by single or multiple types of collateral. These assets aim to track the price of reference assets through over-collateralization with liquid assets and liquidity pools in secondary markets. This innovative approach ensures consistent value and stability between the reference asset and its pegged counterpart.
Vaults are central to Alloy by Tether, serving as storage for user collateral, unreleased aUSD₮, and information on user Collateral Minting Positions (CMP). Each Vault has a specific liquidation threshold set at a clearance point or maximum MTV (Minted Token Value). The clearance point is set at 75%. In other words, if the value of aUSD₮ minted within a CMP exceeds 75% of the value of XAU₮ (Tether Gold backed by physical gold) used as collateral, that CMP becomes eligible for liquidation. It should be noted that users must complete KYC verification to interact with Vaults.
Additionally, Alloy by Tether is compatible with Ethereum’s EVM, supporting chains including Ethereum Mainnet, Polygon, Optimism, Arbitrum, and BNB Chain. The platform uses Solidity as its smart contract programming language, enabling flexible operations across different blockchains while maintaining high security.
aUSD₮ is the first token in the Alloy by Tether series, designed to track the value of one U.S. dollar. It offers the functional advantages of the dollar—such as widespread use in payments, trading, settlements, and savings—while incorporating the intrinsic benefits of gold, including scarcity, low volatility, and purchasing power preservation. According to the official website, as of June 18, more than 8 million aUSD₮ tokens have been minted.
What makes aUSD₮ unique is that it is over-collateralized by Tether Gold (XAU₮), which represents real physical gold stored in Switzerland. Users can mint aUSD₮ using XAU₮ as collateral via Ethereum smart contracts. XAU₮ is a gold-backed stablecoin issued by Tether, with each token representing one troy ounce of pure gold on a London Good Delivery bar, offering advantages such as no custody fees. Data from Ethereum explorers show that as of June 18, the circulating supply of XAU₮ exceeds 246,000 tokens, with a market cap of approximately $570 million.
Furthermore, the aUSD₮ smart contract maintains transparency by monitoring collateral and minted tokens, utilizing price oracles to continuously assess the Minted Token Value (MTV) ratio. Beyond aUSD₮, Alloy by Tether plans to support the creation of other Tether assets with different backing mechanisms in the future, including yield-generating products.
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