SpiceUSD (USDS), the Spice Trade protocol’s stablecoin, concludes the top five biggest gainers for the voting results of week 23. The token gained 8,795 spots to rank 204 on the overall chart. In this article, we will be giving an overview of the Spice Trade protocol and the SpiceUSD (USDS) to explain why our voting community supported the token to push it up the charts.
Before reading, please keep in mind that the information provided here is provided solely for information purposes. The information is not intended to be investment or financial advice. Kindly conduct your research before investing.
What is SpiceUSD?
Spice Trade Protocol introduced SpiceUSD (USDS) as a novel concept for a stablecoin that would automatically adjust and safeguard against inflation. The idea was to produce a stablecoin that preserved the US dollar’s relative purchasing power.
When inventing the SpiceUSD (USDS), the Spice Commerce protocol’s primary assumption was that there was a huge demand for a decentralized, on-chain, open-source, value-stable, scalable, modular, cross-chain, and capital-efficient system for global trade. To eliminate friction and maintain tight pegs, such a system should have deep, long-term, and protocol-owned liquidity. They believed establishing such a system would help humanity move closer to a more peaceful and prosperous future.
How is the USDS price stabilized?
Arbitrage is used to keep the price of USDS stable. When USDS prices rise above $1, it is more profitable to mint USDS with SPICE and collateral such as USDC, then sell the USDS on the market. It is favorable to redeem USDS for collateral if the price goes below $1.
What makes Spice Trade unique?
Spice Trade intends to build a system based on the following principles;
- On-chain and decentralized: The Spice Trade protocol plans to reduce the likelihood of custodial risk. This contrasts with centralized, stable currencies, which may pose a major custodial risk.
- Modular: The Spice Trade protocol is highly modular, allowing it to fit both immediate and undiscovered use cases.
- Open-Source: Spice Trade’s main value is creating an open-source environment where anyone with a good idea may contribute and build on top of the Spice Trade protocol.
- Protocol-Owned liquidity based on Starfish Topology: The Spice Trade protocol is based on RadioShack’s Starfish Topology concept, which is aimed to provide significant liquidity at a low cost.
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