Neutral, an open financial protocol building a suite of financial products on-chain, and has announced the launch of its first product, a stablecoin called Neutral Dollar (NUSD). Neutral Dollar is currently collateralized by DAI, TUSD, PAX, and USDC, and its constituent basket will evolve to include other stablecoins, further increasing stability as the market matures.
Neutral Dollar’s value is maintained by a unique economic mechanism, which rebalances the composition of the basket in reaction to price fluctuations and enables on-chain swaps between stablecoins within the basket. As a result, Neutral Dollar solves the issue of fragmented liquidity in the stablecoin market and offers full transparency of its assets with real-time audits.
Rigorous testing by Neutral has consistently illustrated that Neutral Dollar is less volatile than any alternative stablecoin on the market and, as such, minimizes investor risk.
The basket composition of the Neutral Dollar is designed to be complementary to the maturation of the stablecoin markets, evolving and including new constituents to offer better price stability, diversification, and scale compared to any standalone stablecoin. Neutral Dollar serves as a solution for end-users by being a more stable, diversified instrument and a conduit for institutions to facilitate liquidity between underlying stablecoins.
Neutral was founded with the aim of launching a suite of decentralized financial instruments (DeFi) in the cryptocurrency market. Sequoia Capital China, the venture capital firm backing significant players in the financial technology industry globally such as Ant Financial (Alibaba), Bitmain, and Stripe, led Neutral’s recent Series A funding round.
[perfectpullquote align=”full” bordertop=”false” cite=”Matthew Branton, Chief Technology Officer of Neutral, and architect of Neutral Dollar” link=”” color=”” class=”” size=””]“Contrary to their name, most stablecoins experience significant volatility. Neutral Dollar provides end users with increased stability and, for service providers, acts as a frictionless liquidity channel between different stablecoins. We want to extend the reach of stablecoins as far and wide as possible, presenting a financial instrument that is accessible, reliable, and truly representative of the stablecoin market. In order for the digital asset space to reach its full potential, the industry needs reliable financial instruments that take us beyond the limitations of fiat currencies, while also upholding the highest standards in stability and transparency. Today, we set the ball in motion towards building on the previous generations of asset-backed, crypto-backed, and algorithmic. Our aim is for Neutral Dollar to be the stablecoin of choice for investors of every grade, and the exemplary stablecoin for the wider market.”[/perfectpullquote]