Kava Labs is developing a stablecoin, USDX, backed by XRP on a Cosmos Zone, which dynamically maintains stability to USD with decentralized mechanisms. Moreover, USDX has a native token, XRS, which is used by validators to vote on blocks and participate in governance.
XRP-backed stablecoin: USDX
Kava Labs is already working with Interledger Protocol [ILP] to bring blockchains, wallets, and exchanges, the interoperability of ILP. Further, Kava Labs is also backed and invested in by Ripple’s initiative, Xpring.
The Co-founder and COO of Kava Labs, Brian Kerr, in a conversation with AMBCrypto said,
“The USDX /xrp peg on our GitHub is merely a specification our developers created in exploration around its feasibility. We have yet to decide if we will strategically pursue this as an initiative for Kava.”
Cosmos is a blockchain that aims to solve the scalability and interoperability problems of many Proof-of-Stake blockchains. USDX will be implemented as a Cosmos Zone designed to peg XRP and issue a XRP-collateralized token, USDX.
Brian Kerr further confirmed that the “specification works and getting XRP into Cosmos is feasible, as well as Cosmos CDPs [Collateralized Debt Positions] with external assets as collateral.”
XRP Community and USDX
The XRP-backed stablecoin was first spotted by a Twitter user, @GermanCryptoInv, after he tweeted,
— Crypto Invest (@GermanCryptoInv) May 16, 2019
Ever since this discovery, the XRP Army/community has been excited about the XRP-backed stablecoin. However, Brian Kerr confirmed that it would require reallocation of huge amounts of resources and a shift in focus from their original project, “Switch App,” which helps users swap cryptocurrencies in the fastest and most secure way, across various blockchains.
He also confirmed that they used XRP as collateral for the stablecoin because of XRP’s liquidity, and because they were “close with the Ripple team so we had a natural lean to supporting XRP… along with BTC.”
Kerr further added,
“We’re passionate about DeFi, but given the scope of a project like USDX, it would require a lot of resources from us to pursue. For this reason, we are taking it slow and weighing the best course for us. It’s hard because ILP has been a huge focus for us, but with our recent release of the Kava Switch App, I think we’re at a good point to consider new projects now.”
Is there a Future for USDX?
The COO also confirmed that if Kava Labs proceeded in this direction, they would start with XRP and BTC. They would move from here to other large-cap coins like Bitcoin, Ethereum, XRP, and Binance Coin, etc.
Additionally, Kerr confirmed that they would “love” to implement USDX and have it support Binance Coin. However, he stated that Kava Labs,
“haven’t spoken to the binance team yet about it. It’s an incredible idea to add to the BNB DEX, using the CDP of USDX to allow DEX users to effectively do margin trades.”
When asked about Kava Labs’ next steps after the testing for XRP was successful, Kerr added,
“We have a lot more things to consider, such as pieces of the go-to market that would be required. example – partners, getting validators on board to run nodes for the blockchain, hiring to support with the needed resources, initial exchange partners, etc.”
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XRP interest on the rise as analysis shows formation of a ‘quadruple bottom’
The cryptocurrency market has been subject to a significant bull run that has not only catapulted the prices of digital assets, but also their corresponding market caps. XRP, the third largest cryptocurrency, had more of a rollercoaster ride rather than the sudden surge enjoyed by Bitcoin, with the coin trading at a 6-month high, at press time.
A recent analysis conducted by DonAlt, the popular cryptocurrency enthusiast, pointed out the dips in the one-day chart of XRP. His tweet read,
A lot of interest in XRP. Kind of looks like a quadruple bottom / head and shoulders.
Not the biggest fan of longing those. If there is one lesson 2018 taught everyone is support is only support for so long.
I’ll be watching this one from the sidelines.”
There was also speculation that it was a good time to buy into XRP when there is a violent reaction at the lows, while going long previously was a risky decision. Previous readings of the XRP graph have shown that any squeeze in the XRP graph will result in a full retracement. Since May 2019, the cryptocurrency grew from $0.28 to the current trading price, which was more than a 100 percent increase.
At the time of writing, XRP was trading at $0.467, with a total market cap of $19.89 billion. The cryptocurrency was growing at a rate of 1.13 percent, with a 24-hour market volume of $42.57 billion.
XRP was in the news recently after its related application, XRP TipBot, came back online after a small downtime. Wietse Wind, creator of XRP TipBot, had tweeted,
“Oops! Sorry! Infrastructure blip. Really easy fix but I enjoyed an offline afternoon with my girls 😇 So I only found out after some time, when I checked my phone. Monitoring, messages, calls 😇 Social media tips went through during the downtime. Sorry!”
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