The global cryptocurrency market is gradually moving away from the pluralistic model of interacting with multiple assets and starting to become more central, revolving around an established and highly capitalized hub of recognized and applicable cryptocurrencies. Now that the utility token has proven its inability to act as a store of value, the coins and stablecoins are turning into the center of investment and capital activity in the market. Bitcoin, Ethereum and USDT Tether currently hold the position of said hub, with the multiple other altcoins acting as the spokes, revolving around the pillars, influenced by their price movements and developments.
Stablecoins have gained a lot of traction in recent years in light of the many events that have rocked the foundations of the global economy and undermined the reliability of many global fiat currencies. With fiat devaluing and losing its qualities as a store of value against the backdrop of mounting geopolitical tension and rising inflation, the stablecoin is taking on the mantle of a haven for storing accumulated value and savings in an immutable manner on the blockchain.
However, the stablecoin market is quite overheated. The main problem is the presence of a single dominant stablecoin – Tether, which is a systematic risk for the entire industry. Statistics indicate that Tether makes up 65% of the daily trading volumes of all stable tokens, valued at over $155 billion. The world’s largest stablecoin is not very stable as a small Taiwanese bank wholly controlled by Tether Ltd Caribbean Bank is used to store all of its US dollar reserves. The legal tribulations surrounding Tether run much deeper, as Tether has paid an $18 million fine to settle the NYAG cryptocurrency’s cover-up. It has also been accused of having no direct connection between the custodian bank and its infrastructure and distributed ledger. With the completely manual issuance of tokens, the system is completely dependent on the reliability of its staff. The latter factor poses serious risks of fraud to Tether, as any misuse of the[artoftheadministratorscouldleadtotheadditionalissuanceorburningofthecoins[artoftheadministratorswouldpotentiallyresultintheheadditionalissuanceorburningofthecoins[kunstvandebeheerderszoukunnenleidentotdeextrauitgifteofverbrandingvandemunten[artoftheadministratorswouldpotentiallyresultintheadditionalissuanceorburningofthecoins
The inherent weakness of Tether’s legal standing extends to the lack of rigorous KYC/AML procedures leading to systematic risk to the stablecoin and its custodian, including the risk of blocking reserve funds. So far, Tether has failed to deliver on many of its promises to deliver transparent audits as publicly available data suggests that the token is 49% backed by unspecified trading papers.
Such risks pose and undermine both the integrity of Tether as a reliable stablecoin and result in significant risks for those who rely on it as a safe store of value for their savings and as a trading tool.
The solution lies in creating a truly reliable and credibly backed stablecoin that can offer its holders an unquestioned degree of transparency and integrity as a digital currency that preserves value based on the inherent qualities of the blockchain. the AAD project creates such a solution in the form of digital cash – stable and liquid as fiat money, limitless and immutable as cryptocurrency – the world’s first digital cash to be well built.
The AAD project plans to hold all of its reserves in a Swiss bank with Cryptographic Proof of Reserve support. The fusion of real-world finance and decentralization means that the coins cannot be issued or burned without the approval of cryptographic signatures from AAD and the Repository Bank, confirming that the account balance has changed. All AAD coins are maintained at a 1 to 1 ratio in US dollars deposited in the reserve account and coins in circulation.
The underlying Cryptographic Proof of Intent algorithm means that the coins will only be issued or withdrawn if the corresponding intent has been registered by a customer on a public blockchain. The ratio of 1 to 1 intent issuance and intent burn amount is cryptographically verified, meaning that issuance without reserve and retirement without withdrawal is impossible due to cryptographic limitations.
Application of mandatory KYC and AML procedures will add a much needed layer of security and legality to the AAD stablecoin, as all new customers are required to pass it on prior to purchasing or selling tokens. A progressive legal framework in Zug, Switzerland, overseen by Swiss authorities, will complement the foundation of the AAD infrastructure built on the Ethereum blockchain and its scalability to other major DeFi platforms.
As the world’s first digital cash built well, AAD will launch a strategic initiative aimed at achieving listing on the most prominent global exchanges, making it available to the wider crypto community. AAD will evolve into a supporting technology for payment systems, remittance payment solutions, e-commerce platforms and other value exchange systems.
Since the main users of Tether are exchanges, arbitrage traders and members of the crypto community, AAD intends to develop a solution suitable for all layers of the decentralized market audience, providing them with a reliable and credible stablecoin. The project will ensure that all the fundamental issues of the stablecoin market are addressed, while rapidly gaining traction and widespread adoption within both the crypto and fiat domains. Combining excellent technical expertise, collaboration with a Swiss bank and full transparency based on impeccable Swiss regulations, AAD aims to become the go-to stablecoin solution in the market.
The AAD project’s tokenomic model is based on the mechanism for monetizing commissions for each transaction performed using the AAD token. The commission is paid in AAD tokens at a flat rate of 0.2% per transaction. The business development team of the AAD project will focus entirely on promoting the token as a means of payment in the e-commerce retail sector, while attracting active market traders who are currently largely exposed to Tether. With annual stablecoins on-chain revenue of $2.5 trillion in 2021, AAD foresees that the introduction of its solution and its integration into such off-ramp systems from Visa and Mastercard as a means of payment will result in an immediately accessible market of approximately $20 trillion.
The AAD project The development team also anticipates significant demand from groups conducting inter-exchange arbitrage transactions. The base of AAD as a secure, transparent and liquid means of payment, it will attract more retail users and new entrants to the decentralized asset market seeking reliable store of value instruments.
The ultimate goal of AAD is to become a medium of exchange for payment systems, allowing developers from all over the world to build their payment solutions with AAD at the core.
There is a huge verifiable demand for stablecoins, but related projects currently in the market have demonstrable design flaws, leading to explicit technical and credibility issues, including investigations, legal action, over-issuing of coins, and others. A true stablecoin must consist of a combination of unique blockchain features, such as immutability, a lack of intermediaries, instant settlements and fiat stability, while maintaining the functionality of a store value and a means of payment.
The AAD project has combined all the necessary elements to build a true stablecoin that relies on a recognized legal framework, a skilled team with extensive professional experience, a Swiss banking partner and legal oversight. The given factors and the existing market composition give the AAD project the necessary foundation to aggressively develop and scale, which will attract investor and bootstrap user engagement.