Why $CMST Stablecoin is Relevant to the Comdex and Cosmos Ecosystems.

3 min readSep 5, 2022

Q4 of 2022 is going to be an epic quarter in the Comdex ecosystem.

Already, we have 3 of Comdex’s most amazing products are currently in their Testnet stages and will be launching fully before the end of the year. Among these products is $CMST stablecoin which will be essential to Comdex and the Cosmos ecosystem in general.

How will $CMST be important to these ecosystems? Well, that is something you must read about to learn. First, note that stablecoins are cryptocurrencies that are pegged to fiat currencies representing a stable purchasing power.

The Composite cryptocurrency ($CMST) is Comdex’s official stablecoin, pegged to the US dollar, with a fixed vaule of $1, because of the rate at which normal cryptocurrencies fluctuate in price ranges, this makes most of them unideal for usage as payment methods.

The ephemerality of most cryptocurrencies hinders profiting for those into the finance industry, and this is the main reason why stablecoin ideas were raised by cryptologists.

What are Stablecoins?

A stablecoin is a cryptocurrency which is barely or not affected by price fluctuation or volatility of the crypto market. Stable, as the name implies, this characterization of digital currency is usually tied to the value of a physical currency, most especially the United States dollars.

With this, the single value of a majority of stablecoins are sold at $1 per unit. When you have stablecoins, you have an unvarying and fixed available income for buying digital goods.

Stablecoin cryptocurrencies are minted by processes which determine their price immobility.

1. Collaterization

Some stablecoins can be gotten by collaterizing your digital assets and physical commodities such as:

Expensive jewelry,
Fiat money, etc.

When the prices of the collaterized assets are not stable, you need to provide more collateral, leading to overcollaterization, so as to secure the stability of your stablecoin.

Algorithm

The minting of stablecoins by steps after step of providing incentives is known to maintain the stablecoin’s stability by causing increases and decreases in supply. In this system, the stablecoin is tied to a value, not the collaterals involved.

Cryptocurrencies run by algorithmic steps are sometimes affected by volatility from market surges and price fluctuations.

Collaterized Stablecoins

Stablecoins can be backed by both the fiat and crypto versions of currency. The ones backed by centralized finance have a ratio of 1:1 against deposits of fiat currency, to make sure that the stablecoin’s value stays in the same price level with that of the assets collaterized, which are usually kept in banks; to regulate the stablecoin.

Stablecoins can be backed by commodity assets, which centralized institutions hold as collateral, instead of physical currency. These are backed with overcollaterization to sustain the peg amidst market surges.

Fiat currency and commodity stablecoins are not found on blockchains, and so they cannot guarantee uncensorship, because the centralized finance institution holding the collateral would want you to have their terms and conditions applied. However, in a blockchain, there is no censorship, and decentralization makes liberality possible.

In the actual fact, stablecoins backed by decentralized finance, such as Composite ($CMST), does not stop you from minting them permissionlessly while you keep your collateral assets in the pools. These coins are often overcollaterized to keep their peg away from the fluctuation of the market.

Stablecoins vs. CMST

Generally, stablecoins offer the following advantages.

Lending,
Borrowing,
Leveraging,
Provision of liquidity,
Annual yield farming,
Stable purchasing power,
A safe way of investment,
Maintaining a stable income,
Long exposure to your collateral.

However, the Composite ($CMST) stablecoin offers the above merits and more; some of which include the following.

Permissionlessness,
No censorships,
Deepened liquidity,
Cheapness, speed, and efficiency,
An ability to be backed by multiple assets across blockchains.

$CMST will serve as the interchain stablecoin on Cosmos to facilitate faster, more efficient, & cheap transactions.

$CMST stablecoin makes uses of an ideal design inspired by the $DAI token, created by MakerDAO, and will serve as the main stablecoin of the Cosmos ecosystem. You can now use your $CMST to level up by collaterizing more of your crypto assets.

About Comdex

A decentralized infrastructure layer of the Cosmos ecosystem, Comdex makes use of its network of financial solutions, giving these to their investors, along with major know-hows about classes of assets as well as other beneficial projects.

To gain more further information about the network, follow the Comdex Network via the following links:

Website: https://comdex.one/home

Academy: https://academy.comdex.one/

Web App: https://dev-cassets.comdex.one/

Newsroom: https://comdex.one/newsroom

Newsletter: www.comdexnewsletter.com/subscribe

Twitter: https://twitter.com/ComdexOfficial

Telegram: https://t.me/ComdexChat

Medium: https://blog.comdex.one

Discord: https://bit.ly/ComdexOfficialDiscord

Reddit: https://reddit.com/r/ComdexOne/

cSwap Telegram: https://t.me/cSwap_DEX