Smart contract platform Celo unlocks transfers for its stablecoin, Celo Dollar

Yesterday, Celo’s on-chain governance system activated the network’s Stability Protocol, thus unlocking the ability to create and transfer Celo Dollars (cUSD). In addition to being a general-purpose development platform, Celo features a reserve contract that allows users to post CELO (Celo’s native asset) as collateral in exchange for the dollar-pegged cUSD. This MakerDAO-esque system also supports reserve assets other than CELO, including BTC, ETH, and DAI, to help maintain the cUSD peg. In the long run, the Stability Protocol can add support for off-chain reserve assets, as well as issue other crypto-collateralized stablecoins if approved by a community vote.

Why it matters:

• In a crowded smart contract platform market, recently launched projects are looking for an edge or a way to differentiate what their platform can offer users or developers. A native, stablecoin-generating stability mechanism might give Celo a leg-up relative to other platforms as most are still searching for developers to build a similar system.

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• Stablecoins continue to rise in popularity. The overall stablecoin market capitalization has more than doubled YTD to meet the growing demand for stable transfer value. Celo Dollar could help drive early Celo network adoption should some of these demand spill over into new platforms. But in terms of popularity, decentralized stability mechanisms like DAI still trail fiat-collateralized stablecoins like Tether and the fast-growing USDC.