Elastos Launches BTCD: Bitcoin-Backed Stablecoin with Dynamic Collateralization Mechanism

According to a recent report by Coindesk, Elastos, the developer behind the Bitcoin DeFi protocol BeL2, has introduced BTCD, a new stablecoin fully collateralized by Bitcoin. The stablecoin maintains a collateralization ratio between 160% and 200% of its value, ensuring robust backing and stability. Elastos Marketing Lead Ahmed IJ explained that BTCD employs a dynamic supply mechanism: when the token price exceeds $1, holders burn BTCD to redeem Bitcoin, reducing supply and exerting downward pressure on the price. Conversely, if BTCD trades below $1, users can mint new tokens by depositing Bitcoin, increasing supply and driving the price back to parity. This innovative approach aims to maintain price stability through algorithmic supply adjustments, positioning BTCD as a potentially reliable Bitcoin-backed stablecoin within the decentralized finance ecosystem.