Equilibrium Labs Launches To Enhance Price-Pegged Stablecoin Algorithms For The Crypto Market
Launching today, the new research and development division Equilibrium Labs will work on compelling new concepts in decentralized finance, with the aim of developing new price-pegged algorithms to bring enhanced liquidity to the crypto market. This division is the R&D arm of the Equilibrium framework, which has successfully launched the EOSDT stablecoin. At this early stage, Equilibrium Labs is completing research and improvements on the Smart Token stablecoin algorithm recently proposed by Daniel Larimer.
Larimer is the software developer and serial cryptocurrency entrepreneur who created the delegated proof of stake consensus mechanism, and is well-known for his work on the EOS blockchain. In an April 2019 Medium post, he describes a new token pegging algorithm that allows for high liquidity and narrow spreads. The algorithm hinges on the concept that a pegged token is a service offered by market-makers willing to be slightly leverage-long in a collateral asset to investors looking to buy stablecoins.
Equilibrium Labs will analyze and suggest ways to enhance Larimer’s solution, and we’ll present this research soon.
Once that work is complete, Equilibrium Labs will turn its attention to integrating the frameworks’s Native Utility Token (NUT) into this concept. That will help NUT achieve widespread adoption as a universal asset, accepted both as internal currency and as governance token by all Equilibrium Labs projects.
Equilibrium Labs is also investigating the idea to involve the crypto community in designing new pegging algorithms, creating fair and reliable mechanisms for the stablecoin market to open new opportunities for emergent decentralized finance businesses.