BabelFish, universal multi-chain stablecoin. Learn about the features and benefits of this stablecoin.
BabelFish’s mind-blowing goal is to improve the circulation of stable currencies and accelerate hyperbitcoinization.
What is a stablecoin?
Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference. They may be pegged to a currency like the USD, or to a commodity like gold.
USD stablecoins have proven to be the main currency of the crypto space, yet as they bloom and DeFi markets expand, the combined USD-peg liquidity is being fractured amongst issuers, bridges and chains.
In the decentralized economy we ought not to rely on one or two issuers of USD-stablecoins but rather enable a thousand stablecoins to bloom and communicate with each other to bring mass adoption. This project propose a simple solution to turn stablecoin liquidity swamps into a liquidity lake: a decentralized aggregator and distributor of stablecoins that can be upgraded to earn yield on the deposits’s respective chains.
Babelfish, what is it?
BabelFish Money is probably the simplest thing in the DeFi Universe.
BabelFish’s team developed XUSD, a meta-stablecoin aggregating, bridging and distributing stablecoins 1:1 across networks that will also soon lend the collateral in blue chip protocols (e.g. Aave, Compound) to earn yield through a user saving product and lending a percent of the protocol’s collateral. The interest from lending protocol collateral will be used to purchase a bitcoin insurance pool and reward FISH stakers on RSK (the protocol’s parent chain).
Soft-launched on mainnet June ‘21 with a focus on enhancing stablecoin flow and hedging risk, XUSD usage has grown organically to become RSK’s largest stablecoin (over $12mn).
The DAO governance soft-launched March ‘22 to give FISH holders voice to propose improvements and vote on parameters such as balancing curves and lending of collateral.
BabelFish’s vision is that
if a user wants to use her crypto-dollars on another chain, she can stick it on BabelFish and seamlessly get 1:1 exchange on the destination chain in a simple experience that also enables smaller issuers to compete by hedging the allocation of issuers in what is currently a duopoly by centralized issuers.
Think of it as a translation device between stablecoins, a decentralized bank for stablecoins accepting deposits and withdrawals across chains.
What does Babelfish Solve?
Since the big bang of DeFi in the crypto galaxy, many stablecoin projects have been created to meet the demand for USD. Different stablecoin brands with unique selling points are competing to represent the same dollar, but they do not translate 1:1, and crypto dollar liquidity is fractured between issuers and protocols.
As stablecoins bloom and DeFi markets grow beyond Ethereum to chains like Avalanche, Binance, Rootstock, Solana, etc. the liquidity is fractured further amongst the bridges used, which is sub-optimal for the industry.
BabelFish abstracts away these differences to aggregate stablecoins from multiple isolated liquidity lakes and provide users access to the combined ocean of crypto-dollars available.
Here’s how it works in essence:
- User deposits an accepted stablecoin on BabelFish protocol.
- Protocol issues XUSD, its convertible stablecoin backed 1:1
- User can use XUSD on accepted protocols, bridge between chains, and redeem back at any time.
In the near future, the protocol will lend some of its collateral to offer yield products and allocate a percentage to build an rBTC insurance pool managed by FISH token holders.
Think of BabelFish as a stablecoin bank with branches across the DeFi multi-chain universe.