In a significant development within the cryptocurrency market, Moody’s Analytics (NYSE: MCO) has unveiled the Digital Asset Monitor (DAM) and DeFi Communities on Monday. DAM, an artificial intelligence tool that was developed over the course of a year using agile frameworks, is specifically designed to predict stablecoin depegging by assessing DeFi (Decentralized Finance) risk and volatility through the analysis of multiple data sources.
The newly launched AI tool meticulously examines 25 fiat-backed stablecoins, including notable names such as PayPal Coin (PYUSD), Tether, and USD Coin. It offers insights into the likelihood of a stablecoin depegging from its fiat counterpart within a 24-hour time frame. Additionally, the tool provides comprehensive information about the stability of the stablecoin issuer, lists the custodians responsible for holding the assets, and evaluates the quality of the reserves.
Moody’s has emphasized the significance of DAM, particularly in the context of the expanding stablecoin market, which now represents approximately 10% of the overall cryptocurrency market. This tool’s necessity is further underscored by the fact that large-cap fiat-backed stablecoins have experienced depegging events a remarkable 609 times in the current year alone. Depegging, in this context, is defined as a movement exceeding 3% against the fiat currency peg.