Stably CEO Kory Hoang: Stably USDS Will Be of Significant Importance for the Tezos DeFi Ecosystem
More and more financial services are coming on Tezos: DeFi, DAO, and stablecoins. Today, we want to talk about Stably—a USD-pegged stablecoin on Tezos blockchain. Nobody can explain it better than its creator, so we asked Stably's CEO Kory Hoang a few questions about his project.
Learn how Kory decided to build a stablecoin, why he chose Tezos blockchain, and why it is difficult to create a stablecoin.
Hello Kory! Please tell our readers about your background. How did you get into cryptocurrencies?
Before Stably, I received a BBA in Finance and Marketing from the University of Washington Bothell. After leaving college I worked as a banker and eventually became an analyst at PitchBook in Seattle, where I picked up the ABCs of venture capital fundraising, entrepreneurship, and the analysis of businesses. I have also done algorithmic trading and advised many hedge funds on various topics ranging from quantitative trading, momentum, and mean-reversion strategies to VIX derivatives and cryptocurrencies.
I met my co-founder David in 2017 at an algorithmic trading meetup in Seattle. He was working for Amazon then as a software engineer, and I was a private equity analyst at PitchBook. We discovered that we both traded very similar strategies, i.e. low-frequency trading of commodities and speculative assets that exhibited high volatility and trend-persistent price anomalies, such as gold ETFs, VIX ETNs, and cryptocurrencies. David and I quickly became good friends, and we continued trading together well into 2017 when the last crypto bubble took place. Our algorithms performed very well that year and we had also been researching blockchain and what potential there was in this disruptive space for entrepreneurship. We settled on stablecoins as the entry point.
The main reason why we founded Stably was that trading crypto vs. stablecoins in 2017 was pretty much dominated by Tether with no other viable alternatives. As a result, we knew that there was a market opportunity present for those who can step in and provide more trustworthy/transparent stablecoins for consumers and investors worldwide. We then wrote and released a whitepaper for Stably, raised $500K of seed funding in April 2018 from prominent VCs like 500 Startups and BEENEXT.
The rest was history.
What is USDS? Is it ready to use now?
Stably USD (formerly “StableUSD”), ticker symbol USDS, is a US Dollar-pegged stablecoin fully backed 1:1 and redeemable for USD held in an FDIC-insured trust account managed by a regulated financial institution. You can create or redeem USDS directly on prime.stably.io. USDS on Tezos will be live in the next few weeks.
What are the three main use cases for USDS on the Tezos blockchain?
In general stablecoins have 3 use cases:
These will be of significant importance for the Tezos DeFi ecosystem that is currently being built. Stablecoins play an important role for automated market makers (AMMs) and money/lending markets which are at the heart of every DeFi system. At the same time, Stably is also exploring novel use cases such as payments with stablecoins, which is much more efficient on the Tezos blockchain infrastructure.
How does USDS differ from USDT?
At its very core, all stablecoins are about trust, primarily that the 1:1 peg to the US Dollar will hold under perpetually. While Tether has demonstrated reasonable doubts about this peg in the past, Stably has always been transparent about the underlying reserve ratio proving the 1:1 collateral. View our Live Dashboard and Attestations of Collateral.
Why did you opt for the Tezos blockchain to build USDS on?
Stably opted for the Tezos blockchain due to its impressive features and potential. We saw the opportunity to bring the first regulated stablecoin onto the Tezos blockchain as a no-brainer. We look forward to utilizing the Tezos blockchain to offer faster and more robust solutions to our existing and future users through a USD stablecoin.
Bringing lending, remittance payments, and trading on to the Tezos blockchain also help provide the Tezos community with more opportunities to partake in the DeFi ecosystem which is part of Stably’s greater mission, to help grow the blockchain economy.
How will you store fiat reserves?
Stably works with regulated financial institutions to hold the fiat reserves that back our stablecoin (USDS).
What wallets and decentralized exchanges on Tezos will support USDS? How will I be able to buy USDS?
Shortly after launch users will be able to buy and sell USDS on Tezos via our platform at prime.stably.io.
We will also provide direct liquidity on popular DEXes like Quipuswap and Dexter Exchange as well as future centralized exchange integrations. We are currently in the process of adding USDS to major Tezos wallets and will publish a list shortly.
Do you have any plans on launching USDS collateralized crypto loans on Tezos?
Stably currently does not have plans to build such a product. However, we are very happy to partner with any team to build out collateralized lending markets on Tezos. We want USDS to become the most traded and lent stablecoin on Tezos and will therefore support any initiative that increases its utility.
What did the process of the USDS creation look like? What challenges did you face?
USDS was first launched in late 2017, we have continuously improved the infrastructure for USDS over time and have always held the vision of USDS being a multi-chain bridge from the real world to crypto. Bringing USDS to Tezos was a smooth process thanks to our past technical, regulatory, and process improvements. We were delighted by the technical tooling that the Tezos ecosystem provided and found the integration straightforward.
Is it actually difficult to create a stablecoin?
There are many steps to creating a stablecoin. Beyond the technical groundwork, there are many financial, legal, and operational hurdles that have to be overcome to ensure that every piece is in the proper place so that the stablecoin can operate smoothly in perpetuity.
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