Sonic Blockchain Pushes Ahead with 23% High-Yield Algorithmic Stablecoin
- Sonic Blockchains algorithmic stablecoin promises up to 23% APR despite past crashes.
- Sonic achieves 720ms transaction finality, pushing the boundaries of blockchain speed.
- Trading activity recorded $21 million in volume after LUNA experienced a 98% decline in value.
Sonic Blockchain continues to develop an algorithmic stablecoin with potential annual yields exceeding 23% while addressing the effects of the 2022 collapse of Terra-Luna cryptocurrencies. Andre Cronje, who co-founded Sonic, has spoken about his PTSD, which remains due to the previous crash. Nevertheless, Sonic continues to pursue its stablecoin development despite volatile conditions in the algorithmic stablecoin sector.
Algorithmic Stablecoins and the Echo of Terra-Luna
Algorithmic stablecoins maintain their price stability through code-based mechanisms that differ from those used in fiat-backed stablecoins. The price-stability mechanism of algorithmic stablecoins became subject to intense investigation following the failure of TerraUSD (UST) in May 2022. Substantial investment flowed into the UST stablecoin because it provided annual returns higher than 20%.
However, UST lost its peg to the US dollar it causing a devastating chain reaction that wiped out over $40 billion in value across the Terra ecosystem including its sister token LUNA. This led to huge losses, and many investors and regulators were on the lookout for such projects in the crypto industry.
Sonics new algorithmic stablecoin aims to address the yield appeal that UST once promised but with the lessons learned from its predecessors downfall. The project began discussions about algorithmic stablecoins future but some experts recommended carefulness because of potential dangers. Despite these concerns, Sonic remains focused on blockchain innovation while delivering attractive earning potential and technical progress in the sector.
Sonic Blockchains Progress and Regulatory Challenges
Sonic Blockchains technological advances have established it as the fastest Ethereum Virtual Machine (EVM) chain worldwide. The platform has reached transaction finality at 720 milliseconds a milestone that sets it apart from other blockchain networks. The platforms speed improvement led to a 66% growth in total value locked (TVL), which currently stands at $253 million after the rebranding from Fantom.
Nonetheless, the company continued facing regulations, especially from the European Union. The new Markets in Crypto-Assets Regulation (MiCA) bill, set to be launched to prevent another collapse similar to Terras, will ban algorithmically stablecoins. The regulation raises more questions about the stability and reliability of such financial instruments, which may slow down Sonics future strategies in the European market.
The Terra-Luna collapse marks a pivotal moment in cryptocurrency history because it affects investors behavior toward these markets. Trading activity persists for LUNA despite its dramatic price decline, which has resulted in more than 98% value loss. The trading activity for LUNA tokens reached $21 million within a 24-hour, indicating that traders are participating in its near-dead state market.
Read more: https://www.tronweekly.com/sonic-blockchain-yield-algorithmic-stablecoin/
Text source: TronWeekly
