Stable Coin is Alive on Wormhole

The Wormhole protocol has gone through iterative releases with improvement of performance and enhancement of features. It currently supports operations like token creation, transfer, and burning for both ERC20 and ERC721. Moreover, there is ongoing work to further support smart contract on the platform and the feature will be released soon. By now, more than 200 tokens are issued on Wormhole, and more recently, Token.io in USA has officially launched the first stable coin on Wormhole, labeled "Token X USD".

Token.io

Token.io was founded in 2015. Steve Kirsch is the CEO and Todd Clyde is the COO.

Token io’s mission is to create the world’s first bank-hosted payment system specifically designed for the digital era. Traditional bank can enter into the blockchain industry quickly by calling the API service provided by Token.io. Token.io will fulfill the great vision in two steps.

• The first step on this journey is the release of TokenOS
  TokenOS powers Token PSD2, Token Connect and Token BankPay. Token.io is licensed by the FCA in the U.K. as an AISP and PISP. TokenOS aggregates thousands of banks throughout the European Union, Banks, payment service providers, fintech developers, merchant and other organizations that want to access banks data APIs usingToken's products to access data and initiate payments.

• The second step on the journey is the introduction of Token X
  This is a stable coin backed 1:1 by fiat currency held in escrow. Token X enables instant movement of funds globally at a very low cost. It will change the way payments are executed for both consumers and businesses. Now there are some banks are cooperating with Token.io, such as the HSBC, SBERBANK, AMAIZ, FIDORBANK, N26.

Why do we need the stable coin?

Stable coin is a cryptocurrency that is normally pegged to the U.S. dollar but is not tied to a central bank, and has low volatility. The price of digital currency may drop by large, but many crypto investors may wish to be prone to the violation.WMost fiat currency is not global, except the US dollar. With stable coin that is pegged to the US dollar, it is made possible for cryptocurrencies to avoid the financial risks. Furthermore, stable coin can potentially stimulate the economy as a payment method.

The benefits to issue stable coin on Wormhole

There are three main advantages:

• Strong Network Security:
  
  As shown above Wormhole is a two-layer security model that adds new features like token creation, transfer, and burning etc. to the BCH network without any modification to the existing consensus of BCH. Original metadata is recorded in OP_RETURN. Token operation is completed through BCH transaction. “Token X USD” perfectly leverages the secure PoW model on BCH network. PoW has been running safely in production for about ten years since the beginning. , Moreover, Wormhole nodes filter the data that is not compatible with the protocol to further improve the security for token operations.

• Low transaction fee
  A good peer-to-peer payment system must have a low transaction fee. For example, if a user buys a cup of coffee for $5 via the payment system, but the transaction fee is almost the same as the price of coffee, the network is then useless. . Stale coin transfer operation on wormhole protocol is just an ordinary BCH transaction. Since BCH has large block size and one block can accommodate many transactions, the amortized transfer fee becomes low.

• High TPS
  TPS matters a lot to a transactional payment system.. TPS of BTC is about 3.3-7, and TPS of ETH is 15-20, and the TPS of BCH is up to 200. (TPS is calculated as: block size / standard transaction size / block interval time (s)). Therefore, users’ transaction on Wormhole can be fairly processed timely.

Conclusion

Stable coin brings up the possibilities for the financial industry.“Token X USD”, as the first stable coin on Wormhole, is just the beginning to a series of following innovations in the domain.