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Digital collectibles will always have volatile prices, but the money used to buy them shouldn’t.
Dapper Labs, the game company behind the Flow blockchain, has announced a new dollar-backed stablecoin made in partnership with Prime Trust, the financial infrastructure provider.
Called FUSD, it will work much like familiar stablecoins Circle’s USDC and Gemini’s GUSD in that it will simply be one-for-one backed by U.S dollars deposited at Prime Trust.
“That’s the first fiat-backed stablecoin on Flow,” Roham Gharegozlou, CEO of Dapper Labs, said in a phone interview. Dapper’s flagship product, NBA Top Shot, has used a USDC integration to date.
Gharegozlou explained that FUSD is happening now simply because it’s needed by non-Dapper Labs companies that are building on the Flow blockchain to give their users a non-volatile way to pay for digital products, one that will also be easily available in the United States and Canada.
So far, most of these third-party apps have accepted payments in the network’s native FLOW cryptocurrency, which is not available on exchanges in those countries. FLOW is trading at $12.56 per token, according to CoinGecko.
New token standard
Notably, Gharegozlou said FUSD also represents the first ERC-20-like token on Flow, enabled by the Flow Client Library (FCL), a new tool that will enable faster development on the network.
ERC-20 is the Ethereum standard that allows the world’s second-largest blockchain to support other tokens beyond its native ETH cryptocurrency.
“FCL unlocks the ability of anyone to make their own ERC-20-style token on Flow,” Gharegozlou said, calling it the “Flow equivalent of Web 3.”
Further, he added that other stablecoins are in the works to come to Flow, such as a Flow-native ETH cryptocurrency.
Such tokens are crucial, Gharegozlou explained. “In order for you to use a token in a non-custodial payment method, it needs to be on the blockchain your payment is on,” he said.
In a non-custodial system, a user’s assets never have to leave their control until they make a payment and trade one asset for another. That protects the user from third-party risk, a key principle of blockchain technology.
More stablecoin options should be good for both developers and users, because with decentralized exchanges wired directly into applications, users will be able to pay in any token they want and the payment will finalize in any token the developer wants, in one transaction.
Further, Dapper Labs is promising Stripe-like simplicity for crypto payments.
Why a new stablecoin?
According to data from Messari, the total market capitalization of the stablecoin market is over $100 billion.
Despite a plethora of options on other blockchains, FUSD is needed now because Dapper Labs wants to get such a payment method to developers building today. Others will come to Flow, but that timeline is not in Dapper Labs’ control.
That said, the vision for FUSD is to enable the Flow ecosystem – not to compete with the giant cross-blockchain stablecoins such as USDC and USDT.
The payment app Ramp will be ready to provide fiat on-ramps immediately and Moonpay will do so soon, according to Dapper Labs.
“This is a very safe, regulated, zero-risk coin that even the biggest companies can use,” Gharaegozlou said.
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