- The CEO of mStable James Simpson led self-proclaimed meta-stablecoin company, introduces the mBTC
- mBTC is pegged to the value of current Bitcoin stablecoins
- Launch preceded by mUSD released by the same company in May 2020
As Bitcoins became more and more scarce and expensive, Bitcoiners began tokenizing their Bitcoins on the Ethereum network through decentralized smart contracts. As a result, several stablecoins emerged on the Ethereum blockchain whose value was pegged to BTC’s value. mStable has realized this market potentiality in a profitable way by releasing this new and unusual meta-stablecoin.
How is mBTC different?
Though it may seem confusing at first glance, this meta-bitcoin stablecoin is an elegant solution to a looming crisis. Though several variants of BTC stablecoins pre-exist on the Ethereum blockchain, there is no contingency plan if any particular Bitcoin stablecoin collapses. This is where the company mStable steps in to solve the issue. mBTC is linked to a bucket of three BTC stablecoins, namely wBTC, renBTC and sBTC. Even in case of a collapse of a stablecoin, owners will not completely lose all their money due to the unique structure of this remarkable stablecoin token, hence the name meta-stablecoin.
mStable users can head to the app and click on the respective icons to begin the minting process. Any user with wBTC, sBTC and renBTC can begin minting this token on its native app platform. This meta-stablecoin can also be redeemed for any of the three Bitcoin tokens on the Ethereum blockchain. However, it is important to note that since mBTC is pegged to Bitcoin stablecoins, it will be just as volatile as BTC. Analysis suggests that the company will initially target a market cap of $8 billion locked as Bitcoin on Ethereum. This new venture is different from mUSD, the other stablecoin from mStable, which is pegged to the value of the US dollar, in the fact that it is decentralized and custody-independent which allows users to easily control their own funds.
New and improved features
The initial deployment was a guarded launch which enabled TVL caps on newly minted stablecoin tokens for the first few weeks. However, upon complete deployment, mStable promises that mBTC would offer high capital efficiency with in-built tail risk minimization features among several others. Moreover, users can also earn interest on their meta-stablecoins through the app’s Compound and open-source Aave lending protocols. Additionally, DEX aggregators such as 1inch and Matcha report that mStable swaps are a major source of stablecoin liquidity. About $400 million worth of mUSD have been minted by dedicated users right from the company’s launch in 2018, leading to the impression that mBTC is also poised to reach similar levels.
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