Can someone please elaborate on the following sections of the Docs?
#1
“Stablecoins are any tokens that follow the price of other assets. They can be pegged to fiat currencies, arbitrary RWA assets, and even other cryptocurrencies.”
Is the idea that CAP stablecoins are “stable” insofar as they maintain a stable peg with the asset(s) to which they are pegged?
#2
“CAP stablecoins will come in various denominations, such as USD, BTC, and ETH. That is to say, CAP stablecoins will follow the price of those assets. This will allow users the freedom of directional exposure, depending on their preferences.”
So, as an example, I could own a CAP stablecoin which is (1) pegged to a cryptocurrency, and (2) denominated in BTC?
CAP stablecoins maintain their peg from the 1:1 mint/ redemption guarantee with the underlying asset. The ‘stability’ here refers to the exchange rate with the whitelisted underlying asset, which is always 1:1 at the protocol level.
Not sure I understand the question here but let’s use capBTC as an example.
Think of capBTC as WBTC on Ethereum. It is always redeemable for the same amount of BTC from the issuer and trades at roughly the same price of BTC on Ethereum money markets. Similarly capBTC is always redeemable 1:1 to wBTC/ cbBTC and trades at BTC price on MegaETH markets.
In case it’s helpful I’ve written an intro to CAP here, in case you’re more curious. There might be some inaccuracies however, as I’m not a contributor to CAP.
