In a significant development within the cryptocurrency market, Moody’s Analytics (NYSE:MCO) has introduced the Digital Asset Monitor (DAM) and DeFi Communities on Monday. DAM, an artificial intelligence tool crafted over the course of a year using agile frameworks, is specifically engineered to forecast stablecoin depegging by evaluating DeFi risk and volatility using data from multiple sources.
The newly launched AI tool conducts a comprehensive analysis of 25 fiat-backed stablecoins, including notable names such as PayPal (NASDAQ:PYPL) Coin (PYUSD), Tether, and USD Coin. Its primary function is to offer insights into the likelihood of a stablecoin breaking its peg with its fiat currency within a 24-hour timeframe. Additionally, the tool provides in-depth information on the issuer’s stability, identifies the custodians of the assets, and evaluates the quality of the reserves.
Moody’s underlines the importance of DAM in the context of the burgeoning stablecoin market, which currently constitutes approximately 10% of the total cryptocurrency market. The necessity for such a tool is further emphasized by the fact that large-cap fiat-backed stablecoins have depegged a staggering 609 times in the current year alone. Depegging, in this context, refers to a movement exceeding 3% against the fiat currency peg.
