Algorithmic stablecoins is one of the main trends in the last few weeks in DeFi.
Where coins like USDC are backed by dollar deposits, new projects have been created to achieve the same stability without each coin being backed by collateral. This is also achieved by a system called “bonds” with coupons and secondary coins that entitle holders to inflation/rebasing anytime the coin price is over $1.
One project that does this is referred to as Basis Cash (BAC). Over its month-long life span, it has seen a lot of interest from investors, with Three Arrows Capital and other funds participating in coin Over its month-long life span, it has seen a lot of interest from customers, with Three Arrows Capital and other funds participating in coin trading.
According to cryptoslate.com, some even attempted to fork it, with too much hype around projects such as Basis Cash. The team behind Mithril and the DeFi protocol Cream did that yesterday when they launched Mithril Cash.
Although few would mention the name of the project on Twitter as it started, in five minutes, the contracts won over $100 million worth of deposits, $400 million in two hours, and over $1 billion in less than 12 hours. This comes in spite of the fact that, close to Yam in the summer, Mithril Cash’s contracts are unaudited.
The explanation for so much interest in the launch was that stablecoins, other algo stablecoins, and DeFi coins such as Sushiswap’s SUSHI, Yearn.finance’s YFI, AAVE, Chainlink, and many more could be deposited by users to receive free Mithril Cash.The yields provided by this farm are annualized in the hundreds of percent, making them highly attractive for investors lying around in their pockets with stable coins or DeFi coins.