Sonic Labs has canceled plans to launch a US dollar-pegged algorithmic stablecoin, opting instead to develop a United Arab Emirates dirham-denominated alternative.

On March 22, Sonic Labs co-founder Andre Cronje said the company was working on a US dollar-pegged algorithmic stablecoin with an annual percentage rate (APR) of up to 23%, Cointelegraph reported.

However, one week later, the firm reversed course.

“We will no longer be releasing a USD based algorithmic stable coin,” Cronje said in a March 28 X post. “Completely unrelated, we will be releasing a mathematically bound numerical Dirham which is settled and denominated in USD, which is definitely not a USD based algorithmic stable coin.”

The shift in strategy comes shortly after the UAE announced it would launch its digital dirham central bank digital currency (CBDC) in the fourth quarter of 2025.

Khaled Mohamed Balama, governor of the Central Bank of the UAE, said the blockchain-based dirham could enhance financial stability and help combat financial crime. The digital currency will be accepted alongside its physical counterpart in all payment channels, according to a report from the Khaleej Times.

Related: Paolo Ardoino: Competitors and politicians intend to ‘kill Tether’

Sonic faced criticism over stablecoin plans

The reversal follows widespread criticism of Sonic’s original plan to launch an algorithmic stablecoin — a model that has raised concerns across the crypto industry since the collapse of the Terra ecosystem in 2022.

Cronje himself previously admitted to experiencing Post-traumatic stress disorder (PTSD) related to algorithmic stablecoin due to previous cycles:

“Pretty sure our team cracked algo stable coins today, but previous cycle gave me so much PTSD not sure if we should implement.”

In May 2022, the $40 billion Terra ecosystem collapsed, erasing tens of billions of dollars of value in a matter of days. Terra’s algorithmic stablecoin, TerraUSD (UST), had been yielding an over 20% annual percentage yield (APY) on Anchor Protocol prior to its collapse.

As UST lost its dollar peg, crashing to a low of around $0.30, Terraform Labs co-founder Do Kwon took to X (then Twitter) to share his rescue plan. At the same time, the value of sister token LUNA — once a top 10 crypto project by market capitalization — plunged over 98% to $0.84. LUNA was trading north of $120 in early April 2022.

Related: Tether’s US treasury holdings surpass Canada, Taiwan, ranks 7th globally

The collapse of the algorithmic stablecoin issuer created shockwaves among both crypto investors and lawmakers.

To reduce systemic risk, the European Union’s Markets in Crypto-Assets Regulation (MiCA) bill will prohibit algorithmic stablecoins to avoid another Terra-like failure.

Meanwhile, stablecoins are increasingly being used for smaller, everyday payments rather than large transfers, according to CoinFund managing partner David Pakman.

“We’ve seen a significant decrease in the size of each stablecoin transaction, which points to the fact that they are being used more as payments and less for large transfers,” Pakman said during Cointelegraph’s Chainreaction live show on X on March 27.

Magazine: Ripple says SEC lawsuit ‘over,’ Trump at DAS, and more: Hodler’s Digest, March 16 – 22

]]> https://earlybirdsinvest.com/sonic-labs-ditch-algorithmic-usd-stablecoin-for-uae-dirham-alternative/feed/ 0 27859 https://earlybirdsinvest.com/discovery-grid-moves-from-opensim-to-o3de-alternative/ https://earlybirdsinvest.com/discovery-grid-moves-from-opensim-to-o3de-alternative/#respond Fri, 07 Feb 2025 03:44:33 +0000 https://earlybirdsinvest.com/discovery-grid-moves-from-opensim-to-o3de-alternative/

Discovery Grid, which had been in OpenSim for more than a dozen years, is moving today to the Open 3D Engine platform, also known as O3DE.

In his announcement, grid owner Rene Vega — also known as Balpien Hammerer in-world — cited declining user engagement and the limitations of OpenSim technology as key factors in the decision. Statistics showed active accounts had dropped to 26 percent of their 2019 levels, while monthly active users fell to 19 percent and total regions decreased to 55 percent of their previous numbers, he said.

“It is clear to me that this grid needs new experiences. It needs the means to ease the development effort by creatives; modern tools are required,” Vega said. “Unfortunately OpenSim lacks these tools.”

The transition to O3DE promises significant technical improvements, including more land space—equivalent to 32,768 standard-sized regions—along with advanced features like realistic ocean dynamics, volumetric clouds, and PhysX5 physics simulation.

To ensure an orderly closure, Discovery Grid implemented a 90-day transition plan, offering free region backups to all landowners and coordinating with the Utopia Skye grid to facilitate inventory transfers for users.

Rather than a complete shutdown, Vega positioned this move as a strategic pivot, stating the business would continue under a new virtual world platform based on O3DE technology. However, no specific timeline was provided for the launch of the new platform.

The closure reflects broader challenges within the OpenSimulator ecosystem, particularly regarding viewer compatibility issues and the platform’s struggle to keep pace with modern virtual world capabilities. Discovery Grid’s transition marks one of the first major moves by an established virtual world from OpenSimulator to the newer O3DE platform.

What is O3DE?

O3DE initially began as Amazon Lumberyard, built on top of the CryEngine game platform technology.

Amazon donated the project to the Linux Foundation in 2021, and O3DE became fully open sourced, with an Apache license.

It is a partner of the Linux-based Open Metaverse Foundation, which was launched in January of 2023, so, at some point, it might support teleports between worlds.

You can check out the showcase of O3DE examples here. There’s not much there yet. A couple of empty city builds, some robotics simulations, and a couple of game demos. None link to anything you can easily access online, though a couple do take you to a GitHub project page. I can’t find any examples of worlds built with O3DE that you can actually visit.

Plus, Unity and Unreal both have free options. Unreal, a high-end game development engine, is free if you have less than $1 million in annual revenues. Unity, popular for web and mobile apps, is free for individuals and companies that have less than $200,000 in revenues.

Is OpenSim losing steam?

Back in 2007, Second Life users figured out how the viewer communicated with back-end servers. This enabled people to build bots for Second Life, and to create alternative viewers to the official one.

Meanwhile, enterprises were getting very excited about the possibility of using Second Life for productivity, training, product prototyping, marketing, and customer support. However, they didn’t want their users in the public Second Life system, with all its gambling and nudity and financial scams. They needed a secure, private environment for their customers and employees.

So IBM and Intel and a few other companies and volunteer developers built a brand new server infrastructure that used the same viewer communication protocols as Second Life. That way, it could be accessed through all the Second Life-compatible viewers. On the back end, however, it was completely different and built from scratch. It even used a different programming language and architecture.

People were excited about being able to have their own private worlds — and to build commercial alternatives to Second Life.

Then, in 2008, Christa Lopes, a computing professor at UC Irvine, invented the hypergrid, and many of these new worlds became hyperlinked.

But then something bad happened.

Companies realized that there wasn’t all that much benefit to doing stuff in virtual worlds. There were better platforms for virtual prototyping and video calls were much more convenient for meetings. OpenSim had a high learning curve.

The way big, complex open source projects normally work is that they have a big community of developers that contributes new fixes and bug fixes. These developers generally come out of the user base. The more users, the more developers. Since most users are not themselves developers, and even those who are have other stuff to work on, you need a very large user base in order to continue innovating.

In particular, having large enterprises like IBM use the platform is key, because they can assign developers to work on the project. It’s not just out of the goodness of their hearts, of course — they want to make sure that a project they use a lot isn’t abandoned, and also that it evolves in a direction they like.

Without corporate backing, and without a large, passionate user base, OpenSim development slowed down significantly.

But so did Second Life.

The learning curve was too steep, the usability wasn’t there, and the benefits were not readily apparent. The technology was supposed to go viral but never did. People tried it out, says, “hey, that’s cool,” and then never went back to it.

Kind of like me with my giant collection of virtual reality headsets.

And OpenSim is way too slow and expensive to be used as a gaming engine. Successful video games need to be able to support thousands of players, at least, with no lag. And, of course, OpenSim has no built-in game mechanics.

As a result, there have been only minor, incremental improvements over the past decade. Teleportation improved. Stability improved. Graphics slightly improved. But basically, anyone who used Second Life or OpenSim ten years ago will find it pretty much the same today.

The usability hasn’t improved. The learning curve is no shorter. There’s still no decent web viewer or mobile viewer.

And, other than some kind of emotional connection to OpenSim and the desire to see it survive, there’s no real motivation for change. For current users, OpenSim and Second Life are fine the way they are. They liked it ten years ago and they still like it.

There’s no killer use case out there that people are clamoring for.

For me, OpenSim is now retro. Like text-based games or eight-bit graphics.

I’m a little sad about it. I’ve spent 15 years writing about OpenSim and used to think that it was the future of interactivity. But I don’t have my own grid anymore, and rarely go into OpenSim for meetings or events these days — so I can see why grid owners might be looking at alternatives.

The one big thing I’ll miss if there’s a big migration to something like O3DE is the hypergrid. Maybe Crista Lopes can take a look at it and see what she can do.

What about you? Are you planning to check out O3DE? What do you think about the future of OpenSim?

Hypergrid Business editor and publisher Maria Korolov is a science fiction novelist. During the day, Maria Korolov is an award-winning freelance technology journalist who covers artificial intelligence, cybersecurity and enterprise virtual reality. See her Amazon author page here and follow her on Twitter, Facebook, or LinkedIn, and check out her latest videos on the Maria Korolov YouTube channel. Email her at maria@hypergridbusiness.com. Her first virtual world novella, Krim Times, made the Amazon best-seller list in its category. Her second novella, The Lost King of Krim, is out now. She is also the publisher of MetaStellar, a new online magazine of speculative fiction.

Latest posts by Maria Korolov (see all)