Cake Wallet has introduced support for dEURO, a decentralized euro-backed stablecoin that uses cryptocurrencies like Bitcoin, Ethereum, and Monero as collateral.
This addition allows users to mint euro-pegged tokens without selling their holdings, while maintaining full control over their assets.
The dEURO model relies on overcollateralization—requiring users to lock in more crypto than they borrow—which provides a layer of stability and resistance to price swings. If collateral levels fall too low, the system triggers automatic liquidations to protect the peg.
Users can earn up to 10% yield from the collateral pool, which is funded by stability fees from dEURO minters. These earnings don’t require giving up custody, aligning with the decentralized ethos.
However, the broader history of decentralized and algorithmic stablecoins raises caution. While dEURO uses real collateral, past failures like Terra’s UST—which collapsed in 2022 due to its unbacked mint-and-burn mechanism—have shown the risks of de-pegging and overreliance on incentives.
Even stablecoins with robust collateral, such as DAI, haven’t been immune to instability. A brief de-pegging in 2023 highlighted the knock-on effects when collateral sources falter.
Despite these challenges, Cake Wallet’s integration of dEURO marks another step in building alternatives to U.S.-dollar-dominated stablecoins, especially in the European digital asset ecosystem.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
Source: https://coindoo.com/new-euro-stablecoin-goes-live-on-cake-wallet/