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Milestone for Cardano with USDM Introduction, First Fiat-Backed Stablecoin
- After prolonged delays, Cardano introduces its first fully fiat-backed stablecoin, USDM by Mehen, which launched 17 March.
- Unlike algorithmic stablecoins, USDM is backed 1:1 by US dollars, offering direct exchange for USD with transparent, high-quality reserves.
- Despite the introduction of USDM, ADA’s price faces a downward trend, losing almost 15% week-on-week.
- Meanwhile Cardano leads in developer activity, indicating robust growth potential.
After long delays, it has finally arrived and Cardano receives its first fully fiat-backed stablecoin. The Mehen token, USDM, had its whitepaper released in November 2022—however, delays caused by US banks meant the token only launched on 17 March 2024.
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According to the whitepaper, Mehen’s mission centres around three fundamental goals:
- To launch a token native to Cardano, which can be directly exchanged for US dollars and is supported comprehensively and transparently by high-quality, liquid reserves.
- To allocate the income generated from the stablecoin’s operations towards grants and eco-friendly investments in entities that are innovating on the Cardano platform.
- To distribute decision-making power and enhance the openness of these initiatives through a decentralised autonomous organisation (DAO) controlled by Mehen users.
Release Marks Milestone for Cardano Ecosystem
The release of the USDM token by Mehen is particularly significant because it marks the first instance of its kind on the Cardano blockchain.
Setting it apart from other offerings like iUSD and DJED, USDM is not algorithmic or synthetic. Instead, it is fully backed by US dollars on a one-to-one basis. This means users can deposit dollars (USD) into their Mehen accounts, which Mehen then securely stores in separate accounts designated for token holders.
After completing these transactions, users are empowered to mint an equivalent amount of USDM cryptocurrency tokens, introducing a new level of stability and trust to the Cardano ecosystem.
ADA Price Continues Downward Trend
Meanwhile, ADA, the native cryptocurrency of the Cardano blockchain has lost almost 15% week-on-week, amid the wider market downturn which saw Bitcoin drop 6% and Ethereum 14%. On the weekly, only Solana and Avalanche managed larger gains, 32% and 23% respectively.
Cardano Leading Developer Activity
In a recent post market intelligence platform IntoTheBlock noted that Cardano is spearheading layer-1 developer activity.
High developer activity is often seen as a strong indicator of a blockchain’s vitality and potential for growth. It suggests that there is a robust community of developers committed to improving the platform’s infrastructure, security, and features.
For investors and stakeholders, such metrics can signal confidence in the long-term viability of the blockchain. Projects with active development are more likely to adapt to changing market demands and technological advancements.
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From a technological perspective, a blockchain that is frequently updated with significant commits can stay at the forefront of blockchain innovation. Additionally, active development is crucial for maintaining and improving the network’s security.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
