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The huge price volatility is the biggest hurdle to a generally accepted payment method for Bitcoin and other digital currencies. At the same time, large numbers of decentralization initiatives are difficult to accept in the market as a tool for ecological value transfer, as they use self-issued pricing oscillations. To solve these issues, it is necessary to have an encrypted digital currency with a stable purchasing power–that being a Stablecoin. including the reserve model, the coinage model, and the digital mortgage model, three models of stable coin solutions are currently available. However, none of these models and related stable coin projects has the perfect mechanism to address key issues like stable coin delivery or the long-term mechanism for stability. A fourth one-an open platform based on the hybrid model is being innovated by Alchemint. It is a global solution for the medium and long-term development of stable coins.
Based on the phasing-in trend in asset tokenization, the chain is estimated to be preserved in the next three to five years at more than 10 percent of global GDP. In this situation, stable coins issued by individuals through digital mortgages are replacing stable coins issued by fiat mortgages gradually and become a major way of granting global currencies.
In order to address the significance of stable coin in the volatile market, Alchemint Foundation has launched SDUSD, which offers traders a stable currency to protect them against market fluctuations with a value of USD1 to1. On 22 December 2018 SDUSD debuted the first NEO decentralized exchange on Alchemint’s platform with the launch of the base commercial pair. The SDUSD is a digital currency issued at the target price on the Alchemint platform. The stable coins issued by any person by mortgaging various digital assets on the Alchemint Platform are SDUSD. The value behind every SDUSD is not the legal currency reserve, but the excess digital asset collateral, unlike the stable coins issued by the institution.
In 2018, USD-backed stable coin projects have been increased by established companies such as Paxo’s PAX, Coinbase/Circle US DC and Gemini's GUSD, which are all providing traders with a value store to hedge against volatile market conditions. Unlike IOU-supported stable coins, the SDUSD is issued through the SAR (Smart Asset Reserve), which provides NEO stability relative to the US dollars (1 SDUSD= $1 USD) by securing NEOs through Smart contracts, at a minimum of 150 percent for each SDUSD. By buying NEO at low rates, users of Alchemint are assured to achieve price stability by engaging in the liquidation of hazardous collateral debt positions.