Will Woo said that Tether’s gold-backed aUSDT gives an average gain of 8% profit, making it an attractive asset over time.
Tether, a stablecoin issuer, introduced its gold-backed stablecoin Alloy (aUSDT) on Monday, June 17. This synthetic dollar is overcollateralized by Tether Gold (XAUt). This launch is a component of Tether’s ongoing endeavor to broaden its presence in the stablecoin market, which is increasingly expanding. Willy Woo, a prominent analyst, observed that this is an innovative business concept from Tether.
Willy Woo Unlocks Tether’s New Stablecoin Strategy
As previously stated, Willy Woo has commended Tether for its innovative decision to introduce a gold-collateralized stablecoin. Woo referred to this strategy as “genius,” emphasizing that the new gold-backed stablecoin aUSDT would generate returns from Gold, which would provide 8% profits on average, in contrast to the 0-5% yields derived from Treasury bills, which USDT earns from T-Bills.
Woo also conjectured that Tether might consider launching a Bitcoin-backed stablecoin as the best in the future, given that it is constructing a substantial Bitcoin Treasury. Nevertheless, Woo recognized that such an action would be illogical in the current bear market, given the volatility of Bitcoin’s price. Nonetheless, a move would be more feasible when institutions adopt BTC as a widely adopted asset class, resulting in a relatively more stable market.
Woo contrasted Tether’s approach with the Terra/LUNA model, which failed due to the underpinning of a stablecoin with a volatile asset while addressing concerns regarding potential pitfalls. The analyst asserted that Tether’s considerable annual income of $5.5 billion and ability to accumulate additional Gold would avert a comparable decline.
Additional Info About the Alloy Platform
Alloy, a new token minting platform that is built on the Ethereum blockchain network, has been introduced by Tether for its new gold-backed stablecoin. The Alloy platform will enable users to generate tokens that Tether’s tokenized Gold further collateralizes. Consequently, this platform will be integrated into Tether’s digital asset tokenization system, which will be launched later this year.
The security, reliability, and stable value of Gold will be combined in this initiative to redefine stability in the digital economy. Tether’s Alloy has introduced “Tethered assets,” a new category of cryptocurrencies intended to monitor reference asset prices by employing various stabilization strategies.
