On the 9th of March, 2011, Alchemint, which claims to be a ”decentralized price-stable cryptocurrency management system” for the NEO blockchain, released an English translation of its whitepaper. The whitepaper announced Alchemint’s token, the SDUSD, which will be a stablecoin like Tether or BitUSD, with SDUSD coins held to a 1:1 ratio to the US dollar.
However, unlike other stablecoins that are only pegged to the US dollar, Alchemint will provide further stabilization for its currency by mortgaging digital assets on the NEO blockchain, implemented via smart contracts, termed the “Smart Assets Reserve (SAR).” To understand how Alchemint’s mortgaging process works, let’s start by defining Alchemint’s key features and how they work in tandem with the mortgaging of digital assets. Under section 2.3, page 19 of Alchemint’s whitepaper; it states that Alchemint provides an “application-level digital currency (SDUSD) through distributed ledger technology,” with a series of “risk control measures,” including the mortgaging of digital assets, and the management of those assets market value.
With these risk control measures in place, the holders of Alchemint’s stable coin will be protected from the fluctuations in market value of their collateral. Also, all mortgaged assets are controlled using smart contracts, thus eliminating the risk of embezzlement or absence of Alchemint.
This leads us to how Alchemint’s SAR fund works together with the mortgaging of assets. This process is quite simple to explain, as it’s almost the same process that banks use for lending to mortgagers.
Alchemint’s process of mortgaging digital assets works like this: The liquidation of assets happens in finance and real estate too, so this should not be seen as an unfair practice. A bank will refinance a loan and ask for the house as collateral. Read more from neonewstoday.com…
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