Following the Terra stablecoin collapse last May, the Terra blockchain ecosystem has another stablecoin concept in the works called “Solid.” The stablecoin Solid and its white paper were revealed by a decentralized finance (defi) project, Capapult Finance, and the idea has been dubbed a “soft-pegged stablecoin” built on Terra.
Terra Blockchain Ecosystem to See a New Stablecoin Called Solid
Roughly five months ago, the crypto community experienced some dark days when the stablecoin terrausd (UST), now called terraclassicusd (USTC), depegged from its $1 parity. Today, USTC is changing hands for $0.03 per unit and the obliterated Terra blockchain ecosystem moved to a new network called the Phoenix blockchain.
With the Terra 2.0 network launch, the crypto community was introduced to a new native crypto called terra (LUNA) 2.0. Following the stablecoin depegging incident, which wreaked havoc across the entire crypto economy, a defi project called Capapult Finance says it plans to launch a new “soft-pegged stablecoin” built on top of the Terra network called “Solid.” The stablecoin concept was revealed in a white paper called “Solid, a Soft-Pegged Stablecoin on Terra.”
The project’s white paper describes Solid as an “over-collateralized and fully decentralized soft-pegged stablecoin on Terra.” Unlike the original Terra blockchain white paper co-authored by Do Kwon, the authors of the Solid white paper are represented by the six alpha-numeric digits of two addresses — “0x7183, 3A2k4j.”
The white paper published on Oct. 19, 2022, stresses that there’s a need for stable assets in the world of defi, but fiat-backed stablecoins don’t cut it, according to the white paper’s authors. “Fiat-backed stablecoins are not in the owners’ control, as was showcased by the Tornado Cash ban,” the white paper notes. The stablecoin’s paper, hosted on the Capapult Finance website, adds:
Thus, to make blockchain technology more common there needs to be an asset with minimal volatility, one that is as decentralized as possible. It is becoming more obvious each and every day that decentralized money needs a decentralized stablecoin.
The paper says Solid will be minted using a collateralized debt position (CDP) scheme similar to Makerdao, and users deposit interest-earning collateral and borrow the stablecoin. The mechanism also works alongside Capapult Finance’s governance token CAPA, and the…
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