The Inter Stable Token (IST) is an overcollateralized, cryptocurrency-backed decentralized stablecoin designed to maintain parity with the US dollar (USD) for broad accessibility.
Inter Protocol employs a fresh approach to DeFi through their community-organized decentralized application that enables users to communicate across different blockchains via IBC (inter-blockchain communication).
Before we go any further, let’s understand what Interchain is.
What Is Interchain?
The Interchain consists of independent but interconnected blockchains created using user and developer-friendly tools. The idea is to bring collaboration and interoperability between chains and ensure that applications are no longer stuck in silos and can scale or move to different chains per their requirements.
Interchain is beneficial in the following ways:
- It allows the free flow of information, allowing users and communities to build autonomous social networks through which they can create value and benefit from the value created by others.
- Developers can create decentralized exchanges and marketplaces, facilitating permissionless global trading opportunities and creating application-specific blockchains.
IST as a Bona Fide Native Stableciom
A native token simply means that the token is mintable and redeemable on a particular network it is built on. IST is issued by the Inter Protocol and can be minted against collateral like ATOM, OSMO once Vaults go live. It can be used across connected chains via IBC, empowering users to participate in cross-chain DeFi. IST can help lay the groundwork for a thriving cross-chain economy.
In its first release, the IST has been integrated with high-quality stablecoins such as USDT and USDC that are bridged over Axelar and Gravity. These stablecoins are fully collateralized and are readily available in the Cosmos ecosystem. Integrating these stablecoins brings some crucial liquidity to the Interchain protocol.
- Inter Protocol’s Parity Stability Module (PSM) is live and through it, users can enjoy low-spread, low-fee trades between IST and high-quality stablecoins like USDC and USDT.
- The team is currently working on the Inter Protocol Vaults to aid in this minting journey. Once this feature is ready, users can deposit collateral to create their Vaults and borrow IST. This gives them the freedom to participate in the $10B+ interchain market while holding onto their collateral.
In the future, these other minting mechanisms can get integrated into the Inter Protocol:
- Users can lock their whitelisted assets (approved by the community) as collateral and mint IST against them.
- Through BLD Boost, stakers can mint a fixed amount of IST by locking their BLD tokens as collateral. The community determines the amount of IST that can be minted against the locked BLD. Locked BLD tokens remain staked and continue to accrue rewards. However, users can access the rewards once the minted IST has been repaid.
Interchain looks to create an interoperable ecosystem of blockchains. Interoperability is crucial for blockchains to unlock their true potential and not be limited to individual silos. The IST token plays a crucial role, serving as a robust stablecoin that brings parity to all users regardless of the blockchain network they use for transactions. IST is easy to mint, convert, and use for various transactions, thus providing a value-add to the Interchain ecosystem.