Raft has launched a new U.S. dollar stablecoin called R, which is backed by liquid staking leader Lido’s staked ether (stETH). According to the protocol’s documents, the stablecoin uses both hard- and soft-peg mechanisms to keep its price around $1. This is the first stablecoin collateralized by Lido Staked Ether (stETH), according to a statement.
Unlike the biggest stablecoins, Tether’s USDT and Circle Internet Financial’s USDC, which are backed by conventional assets like U.S. Treasuries, Raft’s stablecoin is backed by a crypto asset. MakerDAO’s DAI, which is collateralized by a combination of Ethereum-based tokens, stablecoins and real-world assets such as U.S. government bonds, has accumulated about $4.6 billion of market capitalization.
Raft’s deployment of its lending protocol allows users to deposit stETH and borrow a minimum amount of $3,000. This strategic design choice is not only about attracting larger players in the liquid staking ecosystem, but it also ensures a healthy balance in the protocol, providing adequate incentives for coverages in the rare event of a position requiring liquidation, said Raft’s Head of Marketing Tony T.
The launch of Raft’s stablecoin is a response to the U.S. banking crisis in March that depegged multiple stablecoins, including Circle’s USDC. This new R product differs from Do Kwon’s UST, which collapsed a year ago, because its assets are issued by unrelated entities, whereas Kwon’s was his own token.