Hydration, the leading decentralized finance (DeFi) protocol on the Polkadot network, has officially launched its native stablecoin, HOLLAR, on September 22. This innovative stablecoin aims to offer a decentralized, over-collateralized solution for users, borrowing its strength from a blend of established cryptocurrencies.
Designed to maintain a stable value pegged to the U.S. dollar, HOLLAR is backed by a diverse array of assets, including Polkadot’s own DOT token, as well as Ether (ETH) and Bitcoin (BTC). Currently, DOT is valued at approximately $4, reflecting a 7% decrease on the day of the launch.
The introduction of HOLLAR comes at a significant time, as the stablecoin sector continues to experience substantial growth. According to DefiLlama, the total market cap for stablecoins has surged to nearly $293 billion, representing a 69% increase compared to the previous year.
HOLLAR incorporates a Stability Module designed to offer real-time price support and facilitate partial liquidations, ensuring user positions are adequately protected. Additionally, the stablecoin seamlessly integrates with Hydration’s suite of trading, lending, and staking products, further enhancing its usability within the DeFi space.
The team behind HOLLAR emphasizes its commitment to creating a safe and fully decentralized alternative to traditional stablecoins, which can often be marred by centralization issues and dependencies on conventional banking. Jakub Gregus, the founder of Hydration, expressed confidence in HOLLAR’s potential to innovate within the stablecoin landscape, stating, “The DeFi space deserves better than half-baked experiments or centralized compromises. HOLLAR represents a reimagining of what stablecoins can achieve when you control the entire execution environment.”
The initial offering of HOLLAR will be capped at 2,000,000 tokens, with users provided an opportunity to mint the stablecoin at an annual borrow rate of 5%. This feature aims to promote accessibility and incentivize participation in the Hydration ecosystem.
Dr. Gavin Wood, the co-founder of Polkadot, also commented on the launch, stating, “I’m looking forward to the release of HOLLAR and making sure it is well integrated with the direction of using stablecoins where they need to be used. I particularly like HOLLAR because it’s decentralized and uses DOT as collateral. I prefer to use something like HOLLAR over USDC or USDT by a massive margin.”
With over $330 million in total value locked (TVL), Hydration is significantly ahead of its closest competitor, Moonbeam, which has around $9 million in TVL. Polkadot, recognized as a Layer 0 blockchain, ranks as the 36th largest blockchain by market capitalization, currently valued at approximately $6 billion.
In the global stablecoin market, Tether’s USDT remains the leader with a market cap of $172 billion, followed by Circle’s USDC, which has nearly $74 billion. Notably, Tether has recently introduced USAT, an American-focused stablecoin, as the stablecoin space continues to expand and evolve.
As HOLLAR enters the market, it stands to challenge the norms of stablecoin usage and establish a more decentralized approach to digital currency, making it a noteworthy development within the ever-growing DeFi landscape.
