In this article, we will discuss two stablecoin projects, GHO and crvUSD, which are not launched yet, but have a large volume. Their potential cooperation with SPOT will also be explored.

• GHO & crvUSD, upcoming whales

GHO is a stablecoin project led by AAVE. Currently, the main information on GHO comes from AAVE's proposal to its community. It is worth noting the following two points:

AAVE V3

As a new version of AAVE, several major functions of AAVE V3 can effectively support the growth of GHO: for example, Portal, eMode and isolation mode. In short, Portal refers to allowing minting and burning of tokens on different chains. Asset cross-chain is realized by burning tokens on Chain A and minting tokens of the same value on Chain B, instead of relying on the traditional cross-chain bridge.

eMode refers to providing different liquidation thresholds and loan to value (LTV) for different asset categories, so that the maximum loan ratio can reach more than 95%, i.e. providing ETH collateral worth $100 can borrow loans worth more than $95..

Isolation mode refers to the expansion of collateral types by isolating asset uses, allowing more highly volatile tokens to become collateral for AAVE lending.

Facilitator

Facilitator forms an interesting part of GHO's design. With the approval of AAVE community governance, a facilitator (e.g. protocol, entity) has the ability to mint (and burn) GHO tokens trustlessly. Different facilitators will be able to apply different strategies to their GHO. Meanwhile, there will be an upper limit on the GHO that facilitators can mint, which is determined by governance. The upper limit is mainly set to maintain collateral and reduce risks.

Facilitator offers an opportunity for other protocols to participate in the GHO minting process. There is no doubt that the first facilitator is the AAVE protocol. In view of the good cooperation history between the AmpleForth protocol and the AAVE platform, SPOT may also join the GHO ecosystem at some time in the future.

Curve is launching a native stablecoin (crvUSD). Michael Egorov, founder of Curve, said that the stablecoin will be over-collateralized and enjoys a revolutionary liquidation mechanism. The white paper has not yet been released. At present, we can only make some highly possible conjectures:

LP tokens and CRV as initial collateral of crvUSD

Specific assets which support the stablecoin are critical to its success, so Curve may whitelist the accepted collateral through a process similar to its introduction of new indicators. Convex currently holds 53.9% of the voting rights of Curve, so the approved LP tokens are well likely to be Convex LP tokens. Meanwhile, in view of FRAX's growing voice in the CRV ecosystem, FRAX is also well likely to join crvUSD as collateral.

The reason why this article discusses these two soon-to-be-launched stablecoins together is that the announcement of crvUSD and AAVE's GHO marks a potential beginning of a new narrative of stablecoins based on specific protocols. For example, AAVE allows holders of stAAVE to pay lower interest rates for GHO borrowed, which indicates that one important function of GHO and crvUSD is to promote the further growth of their own liquidity staking.

• SPOT: safe value storage asset independent of liquidity staking risks

In the AMA on August 25, 2022, Evan Kuo, founder of the AmpleForth protocol, said:

"I think the first mission is to make it common knowledge within the crypto-verse that SPOT's design is a significant breakthrough, and considerably better wrt the point of crypto than all existing approaches."

The reason for this judgment is that the structure of SPOT does not depend on the underlying liquidity staking. Specifically, SPOT is generated by A-Tranche after AMPL risk stratification, and its value does not depend on liquidity staking.

On the other hand, most of the current popular liquidity staking applies the over-collateralized mode to mint stablecoin. Its core logic is that collateral worth of $100 mints stablecoin worth of $70, which requires a large number of assets to be collateralized for liquidity staking at the bottom and yield staking to enhance the credit of the stablecoin.

SPOT applies the Tranche mode, instead of the over-collateralized mode. Through risk stratification of underlying assets, SPOT mints stablecoin by the safety part of its assets. In other words, the foundation of SPOT can achieve a safe and stable state without a large number of liquidity staking. The safety and value maintenance of A-Tranche ensure the safety and value maintenance of SPOT. Therefore, SPOT is an innovative safe value storage asset.

SPOT ecology differentiates itself from the liquidity staking of the over-collateralized mode. Through a secondary development of the high-risk Z-Tranche, SPOT can also create a unique sustainable and stable income channel, attract capital to mint SPOT, and improve capital efficiency. Due to limited length of the article, this part will be further introduced in the future.

To sum up, as a value storage asset different from the traditional over-collateralized mode, SPOT can cooperate with GHO, crvUSD and other upcoming whales in the stablecoin projects. Particularly in the GHO project, SPOT can consider applying to become a facilitator in the future to help GHO enrich the diversity of minting. In view of the good cooperation between AAVE and AMPL in the past, this is a highly feasible option.