Cosmos’s fledgling decentralized finance (DeFi) ecosystem previously relied on the promise of Do Kwon’s digital dollar, and the algorithm that supposedly backed it, to build up its on-chain lending, borrowing and exchange markets. When UST came crashing down, its role was assumed by various different stable currencies – the most popular being wrapped USDC, a synthetic version of the centralized USDC stablecoin issued on the Ethereum blockchain – but these alternatives didn’t offer the same security to users that a natively issued stablecoin could.
