On Tuesday, Cake Wallet launched the decentralized stablecoin dEURO, enhancing its range of euro-based digital assets. This stablecoin is overcollateralized with cryptocurrencies like Bitcoin, Ether, and Monero, requiring users to deposit more value than the dEURO they mint. This overcollateralization protects against de-pegging risks, as explained by the dEURO team. The stablecoin also includes automatic liquidations if loan-to-value ratios fall below a set level. Users can earn a 10% yield on the crypto backing dEURO while retaining control of their funds. This yield comes from stability fees paid by those minting the stablecoin, which are pooled to maintain stability and liquidity. While decentralized stablecoins align with the cypherpunk ethos, critics highlight risks, citing the collapse of the Terra-LUNA ecosystem and its stablecoin UST in May 2022. Unlike UST, dEURO and similar coins require collateral, but even collateralized stablecoins have faced de-pegging issues, as seen with DAI in March 2023. Read more AI-generated news on: https://app.chaingpt.org/news

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