Agora to launch AUSD Stablecoin 3.0 on Ethereum

Nick Van Eyck, CEO of Agora and son of asset management giant Van Eyck, will launch the US dollar-pegged stablecoin AUSD on the Ethereum network in June.

This step introduces the concept of Stablecoin 3.0, aiming to change the digital dollar market.

Stablecoin 3.0: How AUSD Plans to Solve Challenges in Utility and Acceptance

Agora envisages that the digital dollar will become the leading currency globally, starting with the Eurodollar market. In a recent blog post, Van Eyck projects the Agora AUSD model to lead this change by 2030, when the stablecoin market is expected to grow from $150 billion to $3 trillion.

According to Van Eyck, stablecoins have evolved significantly over the past decade. Stablecoin 1.0 started with Tether (USDT), which introduced a centralized digital dollar.

Read more: What is Stablecoin? Beginner's guide

Following this, came the era of Stablecoin 2.0, represented by USDC and BUSD. They offered more transparency and licensing but retained the single-partner distribution model. However, this model often led to conflicts of interest, as tangible economic benefits were shared with major competitors.

Stablecoin 2.0 issuers have benefited from rising interest rates, but the advent of “yielding stablecoins” presents new challenges. Many jurisdictions classify these products as securities, which limit their utility, acceptance and liquidity. They also struggle to sustain business models and develop ecosystems due to inadequate margins.

“Although these products are broken down by dollars, these products are essentially luxury products. They may try to brand themselves as a stablecoin or use it as a means of payment or trade, but they are unlikely to generate significant interest in these areas. “High demand is being fronted by traditional corporations, financial services firms and the use of $25-50 billion in circulation,” Van Eck explained.

Van Eck emphasized that businesses are the real drivers of utility and cash flow for a stable coin. Agora's AUSD represents Stablecoin 3.0, designed to compensate businesses for their contributions, such as listing tokens, providing liquidity, offering transactions, and accepting AUSD as payment or collateral. This equitable approach aligns economic interests with businesses, provides high recurring revenue and promotes growth through improved services for consumers.

Read more: Guide to the Best Stablecoins in 2024

Agora's revenue sharing model allows businesses to reinvest in development, marketing, security and user acquisition, creating a mutually beneficial ecosystem. While Australian USD holders will not directly receive any of the products or revenue generated by Agora, the model will ensure that liquidity and utility-driven businesses are adequately compensated.

Additionally, AUSD is fully backed by cash, US Treasury bills and overnight repurchase agreements. VanEck manages the reserve fund for Agora, ensuring that AUSD is stable and reliable.

In April, Agora successfully raised $12 million in a seed funding round led by digital-asset venture firm Dragonfly. General Catalyst and Robot Ventures participated in the round.