How does SigmaUSD maintain its peg?

SigmaUSD is overcollateralized by ERG reserves. SigRSV holders absorb ERG price volatility in exchange for potential profits when reserves grow.

It's decentralized and transparent, but like all crypto-collateralized stablecoins, extreme market conditions could stress the peg.

Economics

Intermediate

What is

Stablecoin?

A cryptocurrency designed to maintain a stable value, usually pegged to fiat currency like USD.

Stablecoins provide price stability in the volatile crypto market. They can be fiat-backed (USDT, USDC), crypto-collateralized (SigmaUSD), or algorithmic. Ergo's SigmaUSD is an algorithmic stablecoin backed by ERG reserves, using the AgeUSD protocol for decentralized stability.

Key Points

Maintains ~$1 value
SigmaUSD is Ergo's native stablecoin
Crypto-collateralized (backed by ERG)
No centralized issuer
AgeUSD protocol ensures stability
SigRSV absorbs volatility

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Frequently Asked Questions

Questions about Stablecoin

Common questions about this topic

How to use SigmaUSD stablecoin?

SigmaUSD is Ergo's algorithmic stablecoin pegged to USD. Mint it by depositing ERG as collateral on sigmausd.io. Use for stable value storage, trading pairs, or DeFi. Redeem anytime for ERG. The protocol uses SigRSV to absorb volatility - SigRSV holders take on risk for potential profit.

How-to

DeFi

How to provide liquidity on Ergo?

Providing liquidity on Ergo depends on the current active DEX or AMM venue. In general, you deposit equal value of two assets into a pool, receive LP tokens representing your share, and earn a portion of trading fees. Spectrum Finance is historical/frozen since February 2024, so verify the active venue, contracts, liquidity depth, and withdrawal process before depositing funds.

How-to

DeFi

How to get started with Ergo?

Start by getting a wallet (Nautilus for browser, Terminus for mobile). Back up your seed phrase securely offline. Get some ERG from a current exchange or verified venue, then make a small test transaction. After that, explore NFTs, mining, DeFi references, or the developer stack if you're a builder.

How-to

Getting Started

What can I do with Ergo?

Ergo supports a broad ecosystem: use SigmaUSD, explore historical and current DeFi references, mix transactions with ErgoMixer where lawful, collect NFTs, mine with GPUs, bridge to other chains via Rosen, and build dApps with ErgoScript. Always verify current project status before sending funds to a third-party app.

Explainer

Getting Started

View all questions

Explore More Terms

Storage Rent Fair Launch Babel Fees VC Chain Emission Schedule Transaction Fees

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Key Points