Boreal
Basics
"Aurora is a collection of blockchain applications that form a completely decentralized financial and banking platform. Founded by a group of blockchain enthusiasts who aspire to see digital currency flourish, Aurora aims to provide these decentralized financial solutions to anybody in the world, regardless of location and status.
Aurora will also develop a stablecoin (the boreal) and banking platform (Decentralized Capital) that integrate with IDEX and the AURA staking network."
- From their own website (10-2019):
"Boreal is the stablecoin of the Aurora network. Inspired by free banking, each boreal is backed by a combination of dapp endorsement and debt from loans.
Dapp support begins with IDEX, as Boreals will always be accepted at their target value as payment for trade fees. Guaranteed redemption on IDEX will help maintain the price as traders are incentivized to purchase boreals and lower their trading costs whenever the currency falls below target. Boreal will also serve as a base asset, allowing traders on IDEX to minimize risk by trading against a stable base currency.
As boreal usage grows, Aurora will begin to issue loans in the currency through the first cryptobank, Decentralized Capital. These debts will act as another form of collateral for boreals and will generate additional boreal demand due to the required use of boreals in loan repayment, both principal and interest."
How do Boreals maintain stability?
- From their FAQ:
"Boreal supply is carefully managed in order to match demand and maintain price stability, originally defined as parity with USD. Over time the price benchmark will transition to a basket of goods and commodities.
Boreals are backed by a combination of retailer endorsement and debt generated from loans. Loan repayment will create demand as consumers repurchase boreals to meet their obligations on both principal and interest. Additional demand comes from the ability to use the boreal as payment on dapps. The first dapp to offer this is Aurora’s own IDEX, where transaction fees can be paid in boreals at a slight discount. Additional dapp partnerships will further expand the boreal use cases.
To help generate demand for boreals, IDEX provides a 5% trade fee discount to those who pay their fees using the stable currency. This discount creates buying pressure as traders are incentivized to pre-pay fees in the form of boreals in order to reduce their overall trading costs."
