Tether, the issuer of the largest stablecoin in the world, USDT, has announced a new digital asset dubbed Alloy – a digital asset tied to gold. Tether describes Alloy as a new type of digital assets or “tethered assets.”
Similar to other stablecoins, Alloy, priced in dollars, is paired with physical gold. Tether says the “over-collateralized asset” references physical gold stored in Switzerland.
Alloy has been developed by Moon Gold NA, S.A. de C.V. and Moon Gold El Salvador, S.A. de C.V., both part of the Tether Group.
This is said to be the first token under the Alloy nomer thus alluding to future digital assets perhaps tied to a commodity.
Currently, Alloy by Tether smart contracts are deployed on the Ethereum Mainnet. Users may mint aUSD₮ by depositing Tether Gold (XAU₮) as collateral through a process managed by Ethereum-compatible smart contracts.
Price Oracles are designed to evaluate the Mint to Value (MTV) ratio constantly.
Paolo Ardoino, CEO of Tether said the stablization mechanism is different compared to USDT, adding that they plan to make the tech available on their forthcoming tokenization platform as well.
Tokenization typically refers to creating digital assets that are referenced to real-world assets, frequently regulated securities.
