Stable Cryptocurrency will have a token called Stable, which targets at reducing volatility by making the price of the token stable at a single dollar. This would make it more suitable for merchant and payment services for instance, though bad for speculation.
Stable Cryptocurrency has raised $133 million from private funding round from different contributors and backers. Some of its latest contributors and backers include Lightspeed, Foundation Capital, Andreessen Horowitz, Wing VC, NFX, Bain Capital Ventures, GV, Stanley Druckenmiller, Kevin Warsh,Valor Capital, Zhenfund, INBlockchain, Ceyuan Ventures, Sky9 Capital and others.
The one year-old, 10-person, Hoboken, N.J.-based cryptocurrency startup announced the specifics of the amount raised. During the funding round on April 18 although the news came to public arena last October.
It is also receiving backing from application developers, crypto exchanges, blockchain wallets and economists. The firm is also gaining financial support from other firms including venture capital firms and some cryptocurrency hedge funds.
Targeting to deal with volatility
One of the challenges affecting cryptocurrencies right now is lack of price stability relative to a popular fiat like the U.S. dollar. That makes it hard to use and adopt even in businesses. The “awkward bridge between the distributed, decentralized owner-less world of cryptocurrencies and the centralized world of fiat”. It is what makes it hard to create stability in the words of managing director at Bain Capital Ventures Salil Deshpande.
While there are some solutions that targeted at ending the problem of cryptocurrency stability, none seems to have had a breakthrough. For instance, a solution that targeted at taking customers’ dollars and giving them cryptocurrencies and then storing the U.S. dollar. Meanwhile you use the cryptocurrency, also doesn’t seem so successful.
Stable coin is launching a token known as Basis, hoping to tackle the problem of stability by having an elastic supply. Thus, to keep its value about a dollar and maintain the price there. So basically the price will not fluctuate as is the case with other cryptocurrencies.
The token will make use of the supply and demand criteria using an algorithmic protocol according to Chief executive Nader Al-Naji.
It is easy to understand that the cryptocurrency can be used as a reliable payment method. This would be very useful for merchants and other users in the markets. If the token is exchangeable with other cryptocurrencies, users of the latter can go ahead and use it in payment. But cryptocurrency traders and investors know that volatility of prices is not always a bad thing. It is clear to see the bad side of this coin. As it cannot be used for purposes of speculation as other cryptocurrencies. Essentially, users of other digital assets can still use it as a payment gateway. And enjoy benefits of speculations through other cryptocurrencies.
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Image Source: Stable Coin