A16z-Backed Protocol Unveils U.S. Dollar Stablecoin Passing Yield from RWA and DeFi

Angle also aims to establish a forex hub offering seamless conversion between its dollar and euro-pegged stablecoins.

AccessTimeIconMar 26, 2024 at 3:00 p.m. UTC
Updated Mar 26, 2024 at 3:02 p.m. UTC
  • Angle's USDA will share the yield earned from the Treasury bill and tokenized T-bill backing assets and a part of the revenue from lending.
  • Yield-bearing stablecoins have mushroomed recently, offering an alternative to incumbent stablecoins USDT and USDC.
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  • Decentralized finance (DeFi) protocol Angle unveiled its new U.S. dollar-pegged stablecoin on Tuesday, which aims to pass on yield from its real-world asset (RWA) backing and revenue from DeFi lending.

    Angle's USDA is backed by U.S. Treasury bills and tokenized versions of T-bills, and token holders who stake their USDA on the Angle Protocol can automatically earn rewards derived from the token's reserve assets yield and revenue from the protocol's lending platform. This way, the target yield for USDA stakers is at least 5%.

    The development came as yield-bearing stablecoins have mushroomed recently, with new offerings seeking to lure funds from market-dominating stablecoins. USDT and USDC do not pass the yield earned on their backing assets to holders. Latest entrants such as Mountain USD and Ethena's USDe raked in $300 million and $1.3 billion in deposits, rwa.xyz data shows, while asset management giant BlackRock also entered the market recently with its tokenized fund represented by the dollar-pegged BUIDL token aimed for large, institutional clients.

    With its new offering, Angle also aims to establish a blockchain-based foreign currency (forex) hub with seamless conversion between euro and dollar without fees and slippage. Angle already offers a euro-pegged EURA token with a $22 million supply. It received $5 million in venture capital funding led by Andreessen Horowitz (a16z) in 2021 to develop its stablecoin-focused DeFi platform.

    "The forex market represents trillions of dollars of daily volume. However, today it’s difficult to find a DeFi protocol offering on-chain currencies trading at true forex rate," said Pablo Veyrat, CEO of Angle Labs, the development organization behind the protocol.

    To boost liquidity for USDA, users will also be able to convert Circle's USDC stablecoin to USDA and back without incurring fees or slippage.

    USDA will start a beta testing phase in the next few days, pending approval by the Angle Protocol's governance, with plans for a broader roll-out in April. The offering will not be available to U.S.-based investors, the protocol said.

    Edited by Aoyon Ashraf.

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    Krisztian  Sandor

    Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.