USDB/USD: Convert USD Bancor (USDB) to United States Dollar (USD)

USD Bancor (USDB) is a stable version of the Bancor Network Token (BNT), backed by BNT locked in Collateralized Debt Positions (CDPs) on the Ethereum blockchain. Launched on July 10, 2019, by Bancor and PEG Network, USDB aims to provide a stable token that allows users to access the Bancor Liquidity Network without direct exposure to BNT. The PEG Network's smart contracts enable anyone to create a stable version of their ERC20 token, allowing users to generate their own stable tokens by staking volatile tokens as collateral. USDB is the first use-case of this protocol.

USDB operates on the PEG Protocol, a system that allows users to create a stable version of any token. The protocol ensures that every issued stable token is backed by a sufficient quantity of its collateral, while allowing any actor to profit by enforcing safety margins. For instance, someone can create a stable version of Basic Attention Token (BAT) pegged to the US dollar. As BAT is deposited into a PEG-integrated smart contract, BAT:USD is minted, allowing users to borrow against the value of BAT. In the case of USDB, users can mint USDB by locking up their BNT.

USDB aims to serve the needs of both speculators and real users in the Bancor Network. It gives networks the ability to segment between speculators, who hold the network's potentially volatile token, and real users, who utilize the network's stable token to access or contribute work on the network. Usage of the stable token drives the price of the volatile token, since the volatile token is required as collateral, in order to mint new stable tokens. In the future, USDB could be used to create new Bancor liquidity pools, allowing users to plug into Bancor pools and generate fees from conversions without direct exposure to BNT, potentially improving returns for liquidity providers.

USD Bancor (USDB) was launched on July 10, 2019, by Bancor and PEG Network as a stable version of the Bancor Network Token (BNT). The launch of USDB was a stress-test for the PEG Protocol, a system that allows users to create a stable version of any token. Bancor, best known as a mechanism for exchanging tokens, was chosen as the first use-case for the PEG Protocol because it represents a classic example of a cryptonetwork where users could greatly benefit from being able to contribute work using a stable token. Following third-party audits of USDB and feedback from the community, Bancor and PEG Network aim to expand the PEG Protocol to additional networks and blockchains.