Blindex, a multi-currency stablecoin DeFi platform, has announced the launch of two new algorithmic stablecoins: $bGBP (British Pound) and $bXAU (Gold).
This announcement is notable, especially because these are algorithmic stablecoins — a topic that continues to generate debate within the crypto community. Given the recent scrutiny around the safety and resilience of Terra’s UST, Blindex’s announcement has attracted extra attention.
The Blindex protocol is also integrated with RSK, a smart-contract platform secured by the Bitcoin network and compatible with Ethereum Virtual Machine (EVM). That means these stablecoins will launch on Bitcoin, a distinctive choice that sets them apart from nearly all other stablecoins on the market. The fact that one of the new stablecoins is pegged to gold — an asset that draws polarized opinions among crypto enthusiasts — makes the project even more interesting.
To learn more, we spoke with Omar Paz, a Core Contributor at Blindex, about the safety of algorithmic stablecoins, the RSK and Bitcoin integrations, gold-backed stablecoins, and other topics.
CoinJournal (CJ): What advantages do you see for DeFi protocols that choose to deploy on Rootstock?
Omar Paz (OP): RSK is the only network that offers decentralized two-way pegging both into and out of Bitcoin, which is essential to avoid centralized points of failure such as custodians. We want to bring DeFi to Bitcoin users, and RSK is a natural choice because it supports smart contracts and is EVM-compatible.
CJ: How do you view the security of algorithmic stablecoins like the new ones from Blindex? Should investors fear a loss of confidence in the peg if a failure occurs?
OP: Blindex’s stabilization mechanism is a hybrid of collateralized tokens and algorithmic components. It takes inspiration from Frax’s approach while making several important adaptations. This combined model has proven resilient over the past year and remains one of the more stable models for algorithmic stablecoins. By combining collateral with algorithmic tokens, Blindex maintains overcollateralization while preserving intrinsic value that supports peg stability.
We have also introduced incentive mechanisms that encourage users to add collateral to the platform in market downturns. Two notable differences in our design: first, we mitigate “bank-run” incentives by ensuring that whether you redeem your stablecoins first or last, you receive collateral proportionally; second, we incentivize long-term liquidity commitments (lockups of 5–10 years), which strengthens the protocol during bear markets. Users appreciate this — over 70% of Blindex staking is locked for 5–10 years.
Ultimately, investor confidence needs proof, and we are confident Blindex is prepared for the challenges.
CJ: The Anchor protocol within Terra’s ecosystem popularized algo-stables through UST, which at one point supported over $16 billion in TVL. How sustainable do you think this model is, and could any issues affect DeFi broadly?
OP: Anchor attracted a lot of attention by offering high yields on stablecoins, but the dynamics are changing as their returns become more variable. They will need to accept that they cannot sustain earlier inflows indefinitely.
I believe DeFi will endure. We are still at the beginning of this new financial ecosystem’s development. It will coexist with traditional finance, driving innovation, transformation, and collaboration. Until it matures, we should expect substantial movement and evolution.
CJ: Regarding Terra, what do you think of their recent move to back UST by buying Bitcoin?
OP: I think this is the right approach. Essentially, they are moving toward a model similar to ours and Frax by adding non-correlated collateral to support their stablecoins. Having real, non-correlated collateral to back value is crucial for stability and strengthens Terra’s claims.
CJ: What will attract users to the newly launched Blindex stablecoins over other market options?
OP: Blindex stands out in three core ways:
Decentralization — All Blindex stablecoins are 100% decentralized. We use only decentralized collateral (Bitcoin and Ether). Significant governance decisions are handled by Blindex DAO, and even cloud services for our apps are chosen with decentralization in mind.
Multi-asset support — The platform can create stablecoins pegged to many asset classes: fiat currencies, commodities, equities, bonds, indices, and even real estate.
Undercollateralization avoidance — Unlike other platforms, Blindex requires collateral equal in value to the amount of stablecoins minted. For example, to mint 100 BDUS (Blindex USD-pegged stablecoin), a user must deposit $100 worth of BTC or ETH together with BDX (Blindex’s utility and governance token).
CJ: What is Blindex’s objective with launching these stablecoins?
OP: Blindex’s goal is to tokenize everything. We aim to help users hedge against currency risk, manage inflation, increase savings capacity, and provide new on-chain investment tools. The new stablecoins expand users’ options for preserving and growing wealth within DeFi.
CJ: Your press release says fiat currencies can be volatile and susceptible to depreciation, and that integrating Blindex with RSK is a major step toward addressing this. Can you clarify what you mean — will stablecoins no longer experience depreciation?
OP: Our intent is to help users protect themselves from fiat depreciation by enabling investments in assets they consider more stable, and by diversifying savings with other on-chain instruments such as commodity- or index-pegged stablecoins. For example, users can allocate part of their holdings to a gold-pegged stablecoin or an S&P 500–pegged stablecoin, or use those stablecoins in other DeFi services to improve their financial position.
CJ: Why choose gold as a pegged asset? How are BTC and ETH used as collateral?
OP: Gold is widely regarded as a safe store of value and a hedge against stock-market risk and inflation — qualities that may be particularly valuable in the months and years ahead. We’ve seen strong demand from users for decentralized gold-pegged stablecoins, so we launched bXAU, the first gold-pegged stablecoin backed by BTC and ETH.
The same stabilization mechanism used for other Blindex stablecoins applies here: users can mint bXAU by depositing BTC or ETH as collateral, together with BDX.
CJ: There is ongoing debate about the transparency of Tether’s reserves for USDT and the safety of consumer funds held in USDT. What are your thoughts?
OP): I’m a strong proponent of transparency. The lack of transparency is the core issue here — had transparency existed from the start, Tether would not have faced the same problems. Decentralized stablecoins address this problem more effectively by design.
CJ: Algorithmic coins are criticized by some as “unsupported.” How do you respond?
OP): Critics have a point: algorithmic stablecoins have not universally proven themselves. There are inherent issues when a stablecoin relies heavily on tokens issued and managed by its own platform and derives value primarily from its relationship with that ecosystem. However, the trend toward adding real, non-correlated collateral — as Terra is now doing by acquiring Bitcoin — points to how projects can bolster algorithmic models and improve stability.