Cardano (ADA), one of the top-performing assets in the crypto top 10 by market cap, continues to strengthen its ecosystem. As the network gears up for its next big Hard Fork Combinator (HFC) event called Vasil, its DeFi sector could add some of the most popular assets in the space.
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At the time of writing, ADA’s price is trading at $0.95 with a gain of 2% in the last 24 hours.
ADA trends down on the 4-hour chart. Source: ADAUSDT Tradingview
Cardano could soon have native support for Tether (USDT) and USD Coin (USDC). Charles Hoskinson, the inventor of this network and CEO of Input Output Global (IOG), shared his enthusiasm for WingRiders.
Wingriders is one of the most exciting DEXs to launch on Cardano and now they are bringing stablecoins! https://t.co/Rpsl9znhyl
— Charles Hoskinson (@IOHK_Charles) Apr 12, 2022
WingRiders, a decentralized exchange running on Cardano, teamed up with two other projects called Flint Wallet and Milkomeda, created to provide sidechains with a friendly user and developer UX, to launch these stablecoins on the mainnet.
According to a Medium post, Milkomeda will deploy the Ethereum Virtual Machine on their Cardano sidechain. This side chain works with a synthetic version of ADA called wrapped ADA (wADA).
In practice, this will allow users to use the Milkomeda side chain and wADA to connect to Ethereum, as shown in the diagram below. This removes friction when trading ERC-20 tokens with native Cardano tokens. WingRiders said:
Milkomeda itself is an EVM based sidechain of Cardano – supports the ERC20 tokens stored for the user (e.g. on their Flint wallet or again with Metamask). A gateway locks these ERC-20 tokens and then issues native Cardano equivalents of these tokens to the Cardano blockchain. This can be done via the Flint wallet.
Integrating Bitcoin and Ethereum with Cardano (ADA)?
As WingRiders explained, the tokens on one side of the two chains will smart contract to be “locked” while the synthetic versions are minted on the other. In the case of the stablecoins, these digital assets are “pre-mined” before the user requests them and are “locked to the Cardano mainnet”.
That way, users can take advantage of an “easy” way to transact on this network. Stablecoin is one of the most important digital assets because it can act as a “liquidity accelerator” and add new users, fresh capital and new assets, such as Bitcoin and Ethereum, to the ecosystem.
However, bridges have become the target of attacks by bad actors. Some of the biggest DeFi hacks of recent times have happened on these platforms. Therefore, the potential for this partnership and ADA’s achievements seems great, but not without potential compromises.
Related literature | Here’s Why ADA Could Replicate Ethereum’s Bullish Breakout in 2017
The inventor of Cardano trusts the team behind the initiative. According to Hoskinson, IOG has been working with WingRiders on multiple projects for “years”. The inventor of Cardano said†
We have been working with the team for years. They are the ones who did the ledger integration for cardano and also adalite. I like and respect their engineers. They also caught the bug in Minswap and made a responsible disclosure to save the DApp from hackers. Good people get a call.