Should AbraUSD matter?

Apologies folks! After reading the title, if you have started googling AbraUSD, it will be not much help. Because there is no stablecoin. So what is AbraUSD? Let’s first start with Abra.

What is Abra?

From the name, it sounds like some kind of magical stuff. But it has nothing to do with Abracadabra 😉

Abra is a financial services and technology company that operates a cryptocurrency wallet service including a trading service for buying and selling cryptocurrencies, a service for earning interest on cryptocurrencies and stablecoins, and a lending services for borrowing against cryptocurrency collateral.

Long story short, Abra provides a mobile-only app for trading cryptos and earning interest on your crypto. What makes Abra special? I will come back with another post later. But let’s find out what is AbraUSD?

What is AbraUSD?

Unlike any other stablecoins, it is not a stablecoin. AbrasUSD is the new name for USD deposit on Abra. It will be backed by several stablecoins including USD Coin (USDC), Binance USD (BUSD), Paxos (USDP), as well as True USD (TUSD). It is an innovative approach to providing optimal liquidity across assets.

As per Abra:

For example, if you hold $180 of Abra USD in your Trade account, you are able to withdraw $180 in any one of USDC, TUSD or USDP, or withdraw any combination of these three assets up to $180. In the above scenario, it doesn’t matter if you had only deposited $50 TUSD, you can still withdraw $180 TUSD. This gives you 1:1 exchanges across USDC, TUSD and USDP for withdrawals from your consolidated AbraUSD holdings.

Thoughts on AbraUSD

It’s a very innovative step from Abra, as per as I know (Let me know in the comments if you know others.) Unlike Binance, which has tried to nail its competitor by delisting three rival stablecoins — USDC, USDP and TUSD — and converting them into the company’s own stablecoin, BUSD. Abra has decided to try the most elegant approach. But the question remains:

• What will happen to its liquidity if anybody tries to withdraw a higher amount?
• What will happen if any of the stablecoins lose parity with the USD?
• Why there is no mentioning Tether (USDT)?

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