BitGo’s USDS will offer unique rewarding mechanisms unseen with other stablecoins as it launches in early 2025.
Crypto custody giant BitGo introduced its new stablecoin, USDS, pegged to the US Dollar and backed by T-bills, overnight repos, and cash. The stablecoin will bring rewarding mechanisms that its competitors, including Tether’s USDT and Circle’s USDC, do not offer.
In a statement, BitGo announced, “Built on a foundation of transparency, USDS empowers the community by deploying rewards, democratizing the stablecoin experience, and putting the power back in your hands.” The custodian will launch its stablecoin in January 2025 through its BitGo New York Trust Company, registered in New York state under its stringent financial regulator, the New York Department of Financial Services.
BitGo to Reward Participants With 98% Profits Generated by USDS
While stablecoins offer numerous benefits to the blockchain ecosystem and settlement processes for businesses and institutions, USDS’ emergence looks to take it one step further. Stablecoin issuers earn tremendous profits from the interest generated by the reserves backing their assets. BitGo, instead of collecting the profits USDS generates for itself, will channel them toward its ecosystem participants.
“The stablecoin market has long been dominated by players who prioritize profits over ecosystem growth,” BitGo mentioned. “USDS addresses this imbalance by redirecting the majority of rewards to network participants rather than concentrating them with sole issuers.” The custodian will divert 98% of its USDS-related earnings to stakeholders.
Eligible participants that can claim a piece of the USDS pie include institutional exchanges and liquidity providers. With high incentivization, BitGo aims to maintain deep liquidity always. Unraveling the reason for its different approach, the custodian noted, “By deploying rewards across the network, USDS encourages widespread adoption and deep liquidity, creating a more robust and resilient stablecoin ecosystem.”
Furthermore, USDS will come with increased accessibility, allowing users to mint the stablecoin with the USD, USDT, and USDC. On the contrary, they can burn their USDS holdings to receive equivalent amounts in USD, USDT, and USDC.
