Equilibrium - Framework for Generating Asset Backed StableCoins

Introduce yourself and tell us about Equilibrium?

I’m Alex Melikhov, CEO of Equilibrium, the framework behind the EOSDT decentralized stable coin. EOSDT is on the EOS blockchain, pegged to the US dollar and backed by liquid digital assets.

We launched Equilibrium in April 2019, and have since collateralized $15 million worth of EOS. Our users have generated 5.5 million EOSDT stable coins and earned 0.3 percent in profits on their collateral so far. That’s why EOSDT is among the fastest-growing stable coins on the main net today. It’s also why Equilibrium boasts the largest EOS balance out of all EOS-based DApps.

Why did you start Equilibrium and what is unique about it?

2019 is a banner year for stable coins. I think this is a momentous time that signals the blockchain market’s maturation. Considering the volatility of the traditional cryptocurrency market, the attention to stable coins is quite understandable. They are a strong tool for hedging risk and maintaining asset value.

The previous year brought lots of popularity to stable coins. 2019 saw the stable coin market triple its share due to a huge influx of new players. According to CoinMarketCap, Tether’s USDT (the stable coin’s market leader) daily trading volume surpassed Bitcoin’s in 2019. That means there is a huge demand for stable coins.

But more importantly, this year revealed the beginning of the competition between centralized stable coins, which are backed by fiat money or real-world assets like gold, diamonds, oil, or even real estate and are lacking transparency of its collateral though, and decentralized stable coins, like our EOSDT. These are transparent by design with the crypto collateral sitting on-chain which can be inspected by anyone at any time. Decentralized stable coins are based on the idea that you can over collateralize liquid digital assets to maintain steady value.

How are you marketing your business?

We are focusing on organic growth and working closely with the community. It is a community-driven project, after all. We have nothing to do with ICO-style projects, scams and failed projects that spoiled the cryptocurrency market’s image. We don’t use any paid promotions like banners or bots in our Telegram channel — everything is real and true. These relationships with the community are the only way to build a trustworthy network around the framework.

What did you learn from your biggest failure?

We are compared to MakerDAO, the current leader on the Ethereum blockchain. It was flattering at first because it’s a big name and we were happy to have other people think our project was of the same scale while being based on EOS, a different blockchain platform. We later understood that it’s not good to be like anyone else. We have a core advantage that no other coin on the market can offer.

What Unique Selling Point (USPs) do you offer that your competitors don’t?

The market lacked a reliable stable coin that was highly transactional and transparent by nature. There were some particular decentralized stable coin projects rolled out on Ethereum, but they still had some drawbacks. The cost of Ethereum transactions is too high, and the network’s capacity isn’t as impressive as EOS’s. We actually saw a market gap for the EOS community and for markets overall, so we decided to fill it by building up the EOSDT stable coin.

There are several approaches to building stable coins. The most general way is just to have some physical assets, like a dollar, sitting in an account. You simply issue tokens pegged one-to-one to USD. This approach is adopted by Tether and Coinbase USDC. It’s mainstream for now. There are a lot of drawbacks to this model, most obviously that it relies on a centralized infrastructure that’s highly regulated.

We believe Equilibrium will be a framework that won’t just be pegged to the dollar, but to other assets in the future as well. An asset is denominated in dollars with a framework that supports many different applications like finance and gaming.

Beyond that, we’re also developing a market-making solution for the framework that will actually support secondary markets. Equilibrium is the market’s first project to actually use REX staking within the EOS platform and give its users the chance to earn a profit on this opportunity.

If you had advice to a new entrepreneur, what would it be?

I would recommend that they not be afraid to enter competition against big players. Equilibrium is entering a market already occupied by major players who hold two-thirds of the market share, and yes, we are going to compete in this field. We see our strengths in flexibility, innovative use cases, and the ability to reach different markets, like different blockchain platforms. 60% of stable coins is based on Ethereum, while we are on EOS. In fact, projects like Equilibrium (and other new players) have definitely already pushed the competition further than was ever possible before on a market dominated by Tether.

What is your future goal for Equilibrium?

Our mission is to open more market opportunities for decentralized applications, especially in the field of decentralized finance. Moreover, the key success factor in strengthening the stable coin market is its adoption by DApps with a different use case, not only as payment or trading pairs on exchanges, but also in hedging risks, as leverage in lending services, and much more. So we now have a lot of partnerships with DApps and are going to have even more in the future, along with increased stable coin generation and trading volumes.

What have been the most satisfying moments in business?

Seeing the outpouring of community support for Equilibrium. We recently conducted online block producer voting, in which we were choosing 30 block producers to integrate into our REX system. More than 3,800 people took part in voting for 200 block producers from all around the world, and we deeply appreciate all the contributions from block producers, the EOS community, and our users. We already staked our 2.5 million EOS for these 30 community-chosen block producers. That is the decentralized governance model working in real life.