BSV expert and developer Joshua Henslee has released a new video where he talks about the launch of Accord Money on BSV. Watch the video via the link or read a summary of Henslee’s thoughts below.
What is Accord Money?
Henslee explains that Accord Money is a stablecoin yield farming project on BSV. It allows users to borrow a stablecoin (Accord Dollar) against BSV at a current interest rate of 15%.
To use Accord Money, users escrow their BSV tokens in a smart contract. In exchange, they receive Accord Dollars, a market-made stablecoin token. This means the more BSV tokens in contracts, the more Accord Dollars will be minted.
Henslee has repeatedly said that having a stablecoin is crucial for BSV. He says he’s not sure this is the right one because it’s from an app rather than a bank, but he notes it already has significant liquidity.
Accord Money’s current collateral-to-debt ratio is 120%. If a user deposits 10 BSV tokens, the contract would release the equivalent of 8 coins in Accord Dollars. Right now that would be around $640, which at 15% APR means the user would have to pay back around $740 to get their BSV back. Accord Money also encourages liquidity by paying BSVers to invest their BSV in the liquidity pools. The different pairs can be viewed on TokenSwap.
About the impotence of a BSV stablecoin
Henslee notes how a stablecoin like Accord Dollar will allow users who believe in the future of BSV to release Dollars without giving up their tokens. He also believes it will attract new liquidity into the BSV ecosystem and solve one of the biggest problems it is currently facing.
As for converting Accord Dollars to US Dollars, Henslee explains how Volt Wallet has a tether bridge on Tron. This allows Accord Dollar holders to exchange their ACD for tokenized Tether, which they can then send to exchanges and sell. Henslee admits that this is an imperfect solution, but it is a solution nonetheless. This will continue to happen until a bank or financial institution issues a stablecoin on BSV due to its extremely low fees.
Stablecoins and interest rates – their impact on digital currencies
Henslee then explains how he wrote an article on interest rates and their impact on digital currency markets. He believes upcoming rate hikes will hurt prices. They will hit stocks and will inevitably have a negative impact on digital currencies.
Henslee sees parallels to the 1970s, when oil prices were also extremely high and the Federal Reserve had to aggressively raise interest rates to fight inflation. Back then, interest rates were in the double digits, and while they may not go as high this time, even a few percentage points into risk-free assets like US bonds will lure investors out of risky assets like digital currencies and into traditional safe havens.
According to Henslee, this will create demand for products like Accord Money as holders want to raise cash without actually selling their coins. In fact, a Crypto Punks NFT holder recently received millions of dollars in loans against over 100 punks. However, this comes with a caveat: if interest rates generally rise, interest rates on these secured loans could rise quickly as well.
Henslee concludes by saying that USDC has the right idea but is on the wrong blockchain. “USDC is a great idea, but it doesn’t work on Ethereum,” he concludes.
Watch: CoinGeek New York Panel, Tokenized Assets, Stablecoins and Custody with BSV
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