The Lago DAO recently voted to pass its first proposal, “putting in motion a series of events resulting in the birth of a new decentralized digital currency: USD2.”
USD2 is implemented on the Kadena blockchain via smart contracts, which are “controlled by the Lago DAO.” This combination of “a secure, Proof-of-work, network and decentralized governance, make USD2 resilient and transparent.”
USD2 today, in its first iteration, “is collateralized 1:1 by kwUSDC, which is a Kadena Wrapped USDC token.” kwUSDC tokens can be “obtained by wrapping USDC from Ethereum via the Lago Bridge.”
In the near future, the Lago DAO is “expected to direct a transition to USD2 V2, which will implement a system to involve the LAGO governance token in the minting and redemption operations.” The goal is “to maintain a Total Collateral Ratio at or above 100%, while enhancing capital efficiency and enabling decentralized governance.”
Lago DAO’s vision is “to enable digital currency to move without interference, with fast and secure settlements being highly beneficial to individuals and businesses alike.”
USD2 minting and redemption operations “are permissionless and available at this website: usd2.lago.finance.” The token address on Kadena mainnet is “lago.USD2”.
In August 2022, Lago Finance announced that they’d bring Bitcoin to the Kadena blockchain.
As noted in the update, BTC represents “the oldest and most trusted store of value in the cryptocurrency space.”
It’s Ethereum-native format, wBTC, was “instrumental in bringing value to Ethereum DeFi in 2018 where it marked the end of the long crypto winter.” Having this wrapped asset on Kadena now marks a milestone “toward bringing more liquidity to the ecosystem and opening new potential lending and trading opportunities with the most widely known cryptocurrency on Earth.”
As explained in a blog post, wBTC is now “the second token live on the Lago Bridge.”
Anyone with wBTC “can quickly and safely transfer it over in a wrapped format called kwBTC.”
The “kw” prefix “stands for Kadena wrapped and is meant to let users know that this is not a Kadena-native asset.”
As with kwUSDC, the bridge will also “support unwrapping of kwBTC, allowing users to burn their kwBTC and receive the underlying wBTC collateral back in their wallet on Ethereum.”
This allows kwBTC “to always be directly redeemed for an equivalent amount of wBTC, ensuring that its value will remain stable within the Kadena ecosystem.”
The developers noted that their bridge currently only “offers support for x-wallet, so ensure that it is downloaded and installed prior to using the bridge.”
To add this new token to x-wallet, simply click “Add more tokens” and input the contract address as “lago.kwBTC” without quotes.