Cake Wallet Adds Support For Decentralized Euro Stablecoin
Cake Wallet has introduced the decentralized stablecoin dEURO, expanding its euro-denominated digital asset offerings. dEURO is overcollateralized by Bitcoin (BTC), Ether (ETH), and Monero (XMR), requiring users to deposit more value in cryptocurrencies than the stablecoin minted. This overcollateralization protects against de-pegging events, and automatic liquidations occur if loan-to-value ratios fall below a set threshold. Users can earn a 10% yield on their crypto holdings without losing custody, generated from stability fees deposited into an equity reserve pool. Critics highlight risks associated with algorithmic and decentralized stablecoins, citing past failures like the Terra-LUNA ecosystem's UST collapse in May 2022. While dEURO's collateral backing aims to mitigate risks, historical instances show that even traditional fiat-backed stablecoins can experience de-pegging issues.
