AIUSD
AIUSD is a generalized term referring to the family of Intelligent Stablecoins issued by X Network in collaboration with AI projects. While the stablecoins are project-specific, tailored to the needs of AI platforms, they share a common minting mechanism enabled by X Network’s robust infrastructure. This approach simplifies the creation of stable payment systems for AI ecosystems. X Network envisions partnerships with diverse AI projects to expand the channels for minting and utilizing Intelligent Stablecoins.
The Problem with Current Payment Systems in AI Projects
Many AI projects currently rely on their native tokens for payments. For instance, Aethir utilizes ATH for payments. However, the process is fraught with complexities and inefficiencies:
Oracle Dependency: Each transaction requires an oracle to determine the real-time price of ATH in fiat, adding an additional layer of computation.
Volatility Risk: The fluctuating price of ATH exposes payment participants to potential financial losses, either through overpayment or underpayment.
User Experience: The complex process of calculating fiat equivalents for ATH makes the payment experience cumbersome and less user-friendly.
These challenges hinder the scalability of AI platforms and create barriers for mass adoption.
AIUSD: Intelligent Stablecoins for AI Payments
To address these issues, X Network introduces AIUSD, a project-specific stablecoin minted through the algorithmic stabilization of AI native tokens. This system is inspired by the Luna/Terra model, with innovations to enhance risk control and ensure long-term stability.
Key Features of AIUSD
Algorithmic Minting and Burning: AIUSD is minted by locking AI native tokens (e.g., ATH for Aethir) and burned when redeemed. This dynamic mechanism adjusts the supply of AIUSD to maintain its peg, ensuring price stability for the stablecoin.
Enhanced Risk Control: Unlike traditional algorithmic stablecoins, X Network incorporates advanced safeguards:
Market Cap Monitoring: Constantly assesses the ratio of AIUSD’s market capitalization to that of the underlying native token.
Volume-Based Analysis: Tracks the trading volume of the native token to understand liquidity trends.
AI-Driven Stability Models: Leverages machine learning models to make real-time adjustments to the minting and burning processes, minimizing risks associated with over-collateralization or under-collateralization.
Simplified Payment Experience: AIUSD eliminates the need for complex fiat conversions during payments. It provides a stable, reliable medium of exchange that integrates seamlessly into AI platforms.
AIUSD in Action: The Case of Aethir
Let’s assume Aethir as an example:
Current Process: Aethir users must calculate the equivalent fiat price of ATH for every payment, relying on oracles for real-time conversion. This introduces delays and exposes users to price volatility.
With AIUSD: X Network enables Aethir to issue an AUSD (Aethir USD) stablecoin.
Users mint AUSD by locking ATH tokens through X Network’s infrastructure.
Payments on the Aethir platform are conducted in AUSD, ensuring price stability and eliminating the need for oracle-based conversions.
The mint-and-burn mechanism aligns AUSD supply with demand while benefiting the ATH token by increasing its utility and locking value.
Benefits of AIUSD for AI Projects
Enhanced Payment Stability: AIUSD provides a reliable and predictable currency for on-chain payments, such as compute resource rentals, licensing fees, or incentives for contributors.
Increased Native Token Utility: By serving as collateral for AIUSD, native tokens gain additional utility and demand, driving long-term value for token holders.
Seamless User Experience: The simplified transaction process improves accessibility, making AI platforms more attractive to both businesses and individual users.
Scalable Financial Infrastructure: AIUSD creates a foundation for scalable payment systems, supporting the growth of AI platforms in the decentralized economy.
Last updated