- The goal of the world’s first “flat” cryptocurrency is to enable people to retain their purchasing power.
- Flatcoin Noun tracks the cost of living, and its value is based on daily US inflation data.
Blockchain Laguna Labs has just launched the first cost-of-living cryptocurrency called Nuon Flatcoin. Unlike other fiat- or commodity-pegged stablecoins, this test token is intended to be an alternative to daily inflation, the company said.
It is a new type of stablecoin inspired by the discussions and proposals of Brian Armstrong, CEO of Coinbase (NASDAQ:COIN), Balaji S. Srinivasan, ex-CTO of Coinbase, and Vitalik Buterin, co-founder of Ethereum. All three have talked about the need to create a cryptocurrency that allows users to maintain purchasing power.
“The value of a Nuon flatcoin is based on daily unbiased, authentic, and on-chain inflation data,” the firm said in a press release. It means that the value of the token remains "flat" or constant over time from the moment of its purchase until its sale.
Other Similar Projects
There are other stablecoins whose designs are part of a concept similar to the Frax Price Index (FPI) launched in April by Frax Finance, which tracks the consumer price index (CPI). Initially, the crypto using Oracle (NYSE:ORCL) data from ChainLink was launched with a value of $1.02 and later reached a maximum price of $1.18, but it has finally remained at $1.05.
There is also the Volt Protocol (VOLT) token that tracks CPI, but its price is not tracked by major data platforms like CoinMarketCap or CoinGecko, nor is it listed by larger exchanges like Binance or Coinbase.
Another crypto linked to inflation is Hedging Coin (IHC), launched a year ago. Its value increases following various burning protocols based on annual inflation data and the monthly rate of the US CPI.
On the launch of the Noun testnet, Laguna Labs CEO Stefan Rust commented that until now stablecoins have been based on centralized and depreciated assets, which represents a “concentration and counterparty risk” and does not accurately reflect people’s lives.
He added that Nuon is “the world's first flatcoin [that] provides a viable alternative to this system and is the first cryptocurrency to solve a massive real-world problem today: inflation."
On the Flipside
- Inflation-linked stablecoins minted so far have yet to show obvious success. So much so that the big cryptocurrency trading companies do not take them into account.
Why You Should Care
- The creators of Noun promise that the cryptocurrency is not only fully decentralized, but also “over-collateralized” and censorship-resistant.
One of the biggest problems facing the largest economies globally is inflation. The constant increase in prices due in large part to pandemic stimuli, the Ukraine War, and international trade bottlenecks have the world on the brink of a major crisis.
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