Raft has launched its new U.S. Dollar stablecoin, R. It is backed by one crypto asset: Lido’s staked Ether (stETH), a liquid staking leader.

According to the Protocol’s documents, the stablecoin that began trading on Monday uses both hard and soft peg mechanisms to maintain its price at $1. Hard pegs rely on arbitrage in order to maintain a price that is stable, while soft pegs rely on users acting based on the expectation that the peg would be maintained in the future.

Raft stablecoin was “the first stablecoin collateralized with Lido Staked Ethereum (stETH)”, according to a press release.

The biggest stablecoins like Tether’s USDT or Circle Internet Financial’s USDC are backed up by conventional assets such as U.S. Treasurys. However, those that use crypto assets to back them have seen mixed results. MakerDAO’s DAI is collateralized with a mix of Ethereum-based assets, stablecoins, and real-world investments such as U.S. Government bonds. It has amassed a market capitalization of $4.6 billion. Do Kwon’s UST, which was backed up by his LUNA token, collapsed spectacularly a few years ago.

DAI and the new R product are different from Kwon’s expensive experiment, because they do not hold traditional bonds. Their assets, however, were issued by unrelated companies, whereas Kwon’s token was his.

After the U.S. After the U.S.

Raft has deployed its lending protocol, which allows users to borrow up to $3,000 by depositing stETH. In an exclusive interview, Raft’s Head Of Marketing Tony T. said, “This strategic choice is not just about attracting large players in the liquid stake ecosystem, it also ensures that the protocol has a healthy equilibrium, by providing adequate incentives to cover positions in the rare case of a liquidation.” He refused to reveal his last name.

Nick Baker is the editor.