Cake Wallet has integrated the decentralized stablecoin dEURO, enhancing its collection of euro-denominated digital assets. The dEURO is overcollateralized by cryptos such as Bitcoin, Ether, and Monero, requiring users to deposit more value than the amount they intend to mint as dEURO. This method acts as a protective measure against market volatility, with automatic liquidations in place when the loan-to-value ratio falls beneath a set level. Users can earn a 10% yield on the collateralized crypto without losing custody of their funds, stemming from stability fees paid by depositors. However, while dEURO and similar stablecoins strive to maintain stability and avoid the pitfalls of previous algorithmic stablecoin collapses, such as the incident with Terra-LUNA's UST, concerns remain regarding their susceptibility to de-pegging events. Overall, the addition of dEURO to Cake Wallet represents an evolving landscape in decentralized finance while still facing skepticism about the inherent risks associated with algorithmic and decentralized stable tokens.

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