What if you could launch your own stablecoin with just a few clicks or commands? The Komodo blockchain wants to make this possible.
Komodo, a multi-chain blockchain platform or “composable Smart Chain platform,” seeks to enable third-parties to create their own customizable blockchains, called Komodo Smart Chains. The platform recently released new beta features to their test net that would enable the creation of stablecoins collateralized with Bitcoin protocol-based cryptocurrencies.
The team calls Komodo a “composable platform,” because users can compose their own blockchain, which is completely independent of Komodo, with its Antara Framework. These blockchains can be notarized to the Bitcoin network, which is good for security, and are customizable through Komodo’s modules.
The platform has enabled anyone with some coding experience to create their own Bitcoin protocol-based cryptocurrencies using Komodo’s Antara composer, a web application for creating your own blockchain. A “Prices” and “Pegs” feature, which is currently being trialed in alpha, will soon make it possible to create stablecoins and cryptocurrencies pegged to assets like stocks and commodities.
The Prices Module will track the price of an asset in the real world, providing meta-data to the Komodo Smart Chain. The Pegs Module has been designed by the Komodo team to make use of that meta-data on the blockchain. Anyone could then lock Bitcoin-protocol based funds to the Pegs Module and then withdraw up to 90% of the fund’s value in stablecoin form, which can then be exchanged for other assets with other people on the stablecoin network through an atomic swap, a smart contract technology enabling people to exchange cryptocurrency for another without centralized intermediaries, such as exchanges. All stablecoins deployed on a Komodo Smart Chain can be listed on the native AtomicDEX or decentralized exchange.
“If you wanted to create a chain, you could do that right now, alone at your computer, without any external support, without any funds—without anything—and you can just like spin up your own blockchain,” said Komodo CTO Kadan Stadelmann of the platform’s smart chain functionality. “This blockchain would literally inherit all of Komodo’s technologies and features—every wallet, every dapp, every system that we brought out for Komodo is automatically compatible with your smart chain.”
Komodo’s stablecoin functionality could allow anyone to create a stablecoin-backed by Bitcoin, Komodo’s native cryptocurrency, KMD, as well as others, and then anchor it to the Bitcoin network for security.
“Anyone can spin up and use a smart chain and stablecoin,” said Stadelmann, who has specialized in programming language C++ and today is a proponent of Rust, a programming language created by Mozilla. The process behind creating your own stablecoin on a Komodo smart chain will be blockchain-based and decentralized.
“There is full transparency,” said Stadelmann. “The biggest problem with [certain] stablecoins is the lack of transparency. We believe that our technology, and the way that we implemented the stablecoin module, provides 100% transparency.”
Komodo, which is based on a fork of the Bitcoin technology called Zcash, is in talks with partners in finance, who are interested in the ability to easily and securely create their own stablecoins. “This feature would allow financial firms and investment firms to spin up a stablecoin within minutes,” said Stadelmann. “So you literally have a stablecoin for specific projects, for specific use cases, for specific products, for specific trading engines.”
Third parties who issue stablecoins on Komodo can choose the amount they wish to issue, as well as other parameters.“If a third party wants to spin up a chain on Komodo, this feature will literally enable them to create a stablecoin,” he said. There are several reasons for doing so. For instance, if a project needed to manage its crypto funds.
“Take a part of your project funds that you have in crypto and transfer it over into a stable coin,” he said. “Let's say, I want to pay salaries to my team. This stable coin would allow me to be much more precise.” With a stablecoin, there’s no need to rely on volatile crypto prices.
The Komodo chain will take the information from a stablecoin chain spun up by a third party and store it on the Komodo blockchain. “We then take the Komodo block, which already contains your stablecoin information, and store it into the Bitcoin blockchain,” he said. “Technically speaking, it even gives you a slightly higher security level than Komodo itself. Because if a hacker really wanted to attack your stablecoin chain, he would have to first attack Bitcoin. Afterwards, he’d have to hack Komodo, and only then would he be able to attack your stablecoin.”
Stadelmann doesn’t see a limit as to what can be done with blockchain and stablecoin technology. “If you are from the fintech sector, you could basically build up a derivative trading platform in a decentralized fashion,” he said. “Blockchain tech is melding with the traditional financial sector. Everything that we see, all these tools, all these financial products in the traditional financial markets can somehow be attached to the blockchain world.”
And stablecoins are helping to make blockchain mainstream, according to Stadelmann. “People now realize that this is money that we were talking about,” he said. “Most centralized exchanges didn't have any fiat relation one to two years ago. When you'd log into an exchange, you just have all these crypto pairs. Someone who is not into this space, not into this stack, would just see ‘BTC-KMD’ pair or an ‘LTC-ETH’ pair. But, now we have these stablecoin pairs, and it gives people that weren't in the space a feeling that this is real money. There are USD pairs now. It's stuff that hasn't been here before.”
Komodo, a multi-chain blockchain platform or “composable […]