Simplex Corporation, a Tokyo-based Japanese fintech firm, and Ava Labs, the creators of the Avalanche blockchain, have successfully tested a new stablecoin system to achieve financial service-level availability and low latency.
As per the announcement, their proof of concept (PoC) has combined Simplex’s stablecoin system, called Simplex Stablecoin, with Ava Labs’ blockchain service, AvaCloud and AvalancheL1, to create a fast and reliable platform suitable for financial services.
What Was Tested?
The test focused on two main goals. First is to ensure that stablecoin transfers are both highly reliable and processed quickly. Another one is to verify that business applications continue to function smoothly once transactions are completed on the blockchain.
For the test, they have used several key tools.
- Simplex Stablecoin handled the issuance and redemption of stablecoins and sent remittance transactions on the blockchain.
- Simplex Fourth controlled private keys and signed remittance transactions securely.
- AvaCloud provided a managed blockchain service to build and run high-performance networks.
- A custom AvalancheL1 network was created with additional features like webhooks. AvalancheL1 itself is a private blockchain that operates using Avalanche’s consensus algorithm.
The results of the test showed strong performance and reliability. The system processed over 1,000 transactions per second in a certain time period. Also, the average transaction finality time was just under one second.
The system performed well with backups in multiple regions. It had good throughput and consistent processing under heavy load. Both firms intend to keep experimenting with particular use cases to further develop the system and get more businesses on board.
The collaboration aligns with Japan’s broader efforts to integrate stablecoins into the financial system. In April, Japan’s Sumitomo Mitsui Financial Group (SMFG), which owns SMBC, also announced to launch its stablecoin in partnership with Ava Labs and Fireblocks.
Also Read: Ripple Joins SBI Holdings to Roll Out RLUSD Stablecoin in Japan
