The former CEO and founder of the now troubled Babel Finance has created a new stablecoin called HOPE. The former premier, Flex Yang, founded Babel Finance which provides services in crypto by offering financial services for crypto assets. The firm, before its downfall offered crypto assets management and brokered trade deals in crypto on behalf of its clients as well as providing lending services for crypto assets. The firm also offers access to crypto mining services and since it started spiraling on a downward trend, efforts were put in place to salvage this investment. Part of the recovery efforts was to create a new coin that would help in recovery of Babel Finance and pay back its investors. This is probably the reason the new stablecoin was named HOPE.
The creation of the HOPE stablecoin is aimed at combining the existing TradFi(Traditional Finance) systems and the new DeFi(Decentralized Finance) system in a quest to offer transparency and security for investors, attributes that were non-existent in other decentralized stablecoins. Mr Yang told TechCrunch that HOPE Stablecoin will receive backing from Bitcoin and Ethereum reserves. He also stated that the stablecoin will maintain its peg to the dollar by utilizing demand and supply forces from the market. This simply means that when there is a high demand for newly minted coins in the market, HOPE stablecoin will sell at a premium price. On the other hand, a low demand in the market means that the stablecoin will sell at a discount.
According to Mr Yang, the fact that the HOPE stablecoin is backed by native reserves within the crypto market and has an entire decentralized finance ecosystem built around it makes the coin unique. He also compared this coin to the issuer of Dai Stablecoin, MakerDAO, but with some additional functionalities. One of these functionalities includes the ability of users to trade digital assets across exchanges without the need to deposit their assets on a CeFi(Centralized Finance) platform. The function will instead be taken by one of its inbuilt protocols, HopeConnect. CeFi platforms are organizations that bridge the gap between TradFi and DeFi by offering custody for users’ funds while trading in digital assets across multiple exchanges. This protocol however, removes custodians while eliminating risk from a user’s credit. The protocol also ensures anonymity by removing the most vulnerable layer in trading digital assets, CeFi, making it easier for users to access liquidity through decentralized mechanisms.
Mr Yang has also addressed the elephant in the room therefore giving investors assurances. If you are wondering what this refers to, Babel Finance was brought down by the collapse of the TerraUSD ecosystem that user pure algorithms relying on its sister token LUNA. This reliance ended up collapsing the two digital assets simultaneously. The former premier however, has assured that HOPE Stablecoin leverages on other mechanisms. He has allegedly promised to invest $10 million of his own money in the HOPE ecosystem. With the project receiving support from prominent investors, the startup is set to add more features to its ecosystem.
The first feature will be HopeSwap, a decentralized finance project to onboard users onto the platform by allowing them to buy HOPE tokens. Other services like HopeConnect will follow suit as well as mechanisms that facilitate lending within the decentralized ecosystem. The project also hopes to onboard several liquidity pools onto the platform to ensure seamless trading across exchanges.
