Decentralized exchange aggregator 1inch has partnered with the ICHI platform to issue a new stablecoin pegged to the U.S. dollar.
In a Thursday announcement, 1inch said it planned to mint a stablecoin “with a blend” of its native 1INCH token and USD Coin (USDC) through ICHI’s Decentralized Monetary Authority, or DMA. The new one1INCH stablecoin — all issuers on ICHI begin with the prefix "one," referring to its Japanese namesake — is aimed at providing a medium of exchange to pay operating expenses, provide liquidity, and distribute liquidity rewards.
“The one1INCH stablecoin can grow into an economic game changer,” says 1inch co-founder Sergej Kunz. “At scale, its treasury can drive value back to 1inch DeFi operations because it is minted and over-collateralized with 1INCH tokens.”
Launched in May, ICHI’s DMA allows projects to create and govern their own fully-collateralized stablecoins — in this case, with 1inch’s native 1INCH token and USDC — which can be minted and redeemed for a set value of $1. The non-profit arm of 1inch, the 1inch Foundation, and ICHI will each contribute $100,000 in tokens as collateral for the stablecoins, allowing for the one1INCH tokens to be minted using 80% USDC and 20% 1INCH.
ICHI’s DMA could lead to a rise in the number of U.S.-dollar pegged tokens as projects look for alternatives to traditional stablecoins. Tether (USDT) remains the largest stablecoin with a market capitalization of more than $62 billion, but other projects including Binance USD (BUSD), USDC, and Dai (DAI), have a sizable share of the market. Other U.S. dollar stablecoins include TerraUSD (UST), TrueUSD (TUSD), Paxos Standard (PAX), HUSD, Neutrino USD (USDN), and Gemini Dollar (GUSD).