LianGuaiyLianGuail’s stablecoin faces practicality, gas fees, and outdated technology issues.

Author: theblock; Translation: Kate, Marsbit

LianGuaiyLianGuail stated that its PYUSD stablecoin allows customers to “buy, sell, hold, and transfer” newly created digital currencies.

However, some social media users questioned LianGuaiyLianGuail’s use of an outdated programming language in its smart contracts.

Stablecoins are ERC-20 tokens issued on the Ethereum blockchain, and using this protocol may incur high gas fees, which could result in expensive transaction costs.

After at least two years of consideration, development, and delays, digital payment giant LianGuaiyLianGuail has finally launched its own dollar-pegged stablecoin, allowing users to “buy, sell, hold, and transfer” tokens on its platform. This may not sound like much, as these operations can essentially already be done using checking accounts or existing LianGuaiyLianGuail accounts holding dollars.

The company asked in its explanation posted on its website: “What can you do with LianGuaiyLianGuail USD (PYUSD) on LianGuaiyLianGuail?” The company stated that this token can be sent for free to eligible accounts in the United States. It can also be used for online shopping, just like using regular dollars or credit cards.

The company added: “If you want a change, you can use PYUSD in our conversion feature to purchase different cryptocurrencies that we support.”

While LianGuaiyLianGuail stated that stablecoins will be launched for eligible US customers starting today, when The Block checked, its website did not immediately display the option to purchase PYUSD. The website requires users to provide their social security number to access encrypted services.

The company stated that it will allow users to purchase PYUSD and then convert the funds into Bitcoin and Ether using “the exchange rate (including the spread that LianGuaiyLianGuail earns on each purchase and sale)”.

Reactions to LianGuaiyLianGuail’s stablecoin

Users on social media also questioned what this token can be used for and who might want it.

“Who would buy LianGuaiyLianGuail’s stablecoin?” asked a self-proclaimed smart contract researcher on Twitter, with the handle @ShieldifyAnon, who pointed out that the payment company’s new stablecoin “uses an outdated version of Solidity from 2018.”

Other users, including software engineer @0xCygaar who frequently discusses crypto on social media platforms, raised concerns about how LianGuaiyLianGuail’s new token allows “owners to pause all transfers… freeze addresses to prevent actions taken… (and) administrators to arbitrarily increase the total supply.”

The decision to issue PYUSD on Ethereum has garnered a lot of attention, with some seeing it as a watershed moment for the protocol.

Bankless founder Ryan Sean Adams stated, “LianGuaiyLianGuail has 430 million active accounts.”

Ethereum Fees

However, there are also people who question this strategy, believing that the cost of using Ethereum for transactions is high.

Web3 enthusiast David Phillips wrote: “LianGuaiyLianGuail has launched a stablecoin on the Ethereum mainnet instead of dozens of stablecoins that only cost two cents. They could have used this approach instead. Honestly, it’s a clever way to make their own high fees look like an insignificant speck next to gas.”

LianGuaiyLianGuail itself seems to acknowledge that high fees can also be generated outside of its ecosystem.

“However, please note when purchasing PYUSD, you may find different prices and fees when purchasing outside of LianGuaiyLianGuail,” it wrote in its explanation about the token.

LianGuaiyLianGuail’s Crypto History

LianGuaiyLianGuail has been active in the crypto space for some time, allowing customers to hold cryptocurrencies such as Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. In its Q1 financial report this year, the company revealed that it custodies nearly $1 billion worth of cryptocurrencies for customers.

Since last year, users have been able to transfer cryptocurrencies between LianGuaiyLianGuail and other wallets.

The company has also invested in blockchain startups, including recently leading a round of investment in Magic, a digital wallet provider that helps businesses migrate customers to web3.

LianGuaiyLianGuail’s Stablecoin Journey

The Block reported in 2021 that LianGuaiyLianGuail had started exploring its own USD-pegged token and had been in talks with some stablecoin protocol developers in the industry.

At the time, the cryptocurrency industry was at a high level with billions of dollars in new capital flowing into the industry, and a series of catastrophic bankruptcies and regulatory actions had not yet occurred. Earlier this year, LianGuaiyLianGuail’s stablecoin ambitions hit a roadblock as it suspended its plans in the wake of reports about LianGuaixos being under investigation.

Despite the scrutiny, LianGuaixos remains a partner for LianGuaiyLianGuail’s stablecoin launch. The company said on Monday that the collaboration is a milestone for the industry.

“The Safest USD-Backed Digital Asset in the World”

LianGuaixos wrote: “PYUSD is the first of its kind, representing the next phase of the dollar on the blockchain.” It is called “the safest USD-backed digital asset in the world.”

As expected, this news was not welcomed by all crypto enthusiasts, and Blockware Solutions Chief Analyst Joe Burnett was blunt about the product’s launch.

He wrote: “The crypto community cheers for LianGuaiyLianGuail launching a USD ‘stablecoin,’ showing they have completely lost their minds.” “Buy Bitcoin. Hodl it. That’s innovation. Not ‘big tech companies investing in blockchain’.”

LianGuaiyLianGuail and LianGuaixos did not immediately respond to questions about The Block’s launch of a stablecoin.

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