Flatcoins are a type of stablecoin that is not tied to a specific asset or fiat currency, but changes according to the movement of inflation. The head of the Coinbase crypto exchange, Brian Armstrong, spoke about this.
“This is something new on the horizon. Above [“плоскими монетами”] a couple of commands work. We are not building anything in this area yet, but we are interested,” said the CEO of the trading platform.
Armstrong believes that flatcoins provide a better store of value while offering a higher return on investment. The coin can be backed by a basket of assets or use an algorithmic approach.
The concept of a new type of stablecoin was first mentioned by Coinbase CTO Balaji Srinivasan in 2021.
Two kinds of stablecoins.
Fiatcoins are pegged to an external fiat currency like USD, directly or indirectly.
Flatcoins are new. If fiat itself starts to inflate, it isn’t really “stable”. So a flatcoin optimizes instead for price flatness vs an on-chain basket of goods.
— Balaji (@balajis) June 7, 2021
“If fiat itself starts to inflate, it is not really “stable.” Instead, flatcoin is optimized to ensure price uniformity compared to a basket of goods on the network,” he explained.
Armstrong himself included the concept of “flat coins” in his list of 10 noteworthy ideas in the crypto industry.
Something like this is needed, he said, because people are reluctant to spend Bitcoin and fiat-backed stablecoins “suffer from inflation and confiscation, just like national money.”
Global inflation rose 4.8% between 2021 and 2022, according to the World Bank. This means that the purchasing power of the currencies has decreased.
There are currently a number of projects to develop “flat coins”. Nuon claims to be the first true flatcoin and is an inflation-resistant token built on top of Ethereum.
In addition, there is International Stable Currency (ISC) based on Solana. The coin is pegged to a diverse set of assets, including Treasuries and gold. The Collypto project tracks real estate and commodity indices.
Let us recall that in March Coinbase named priority areas for improving the Base ecosystem, among which flatcoins were mentioned.
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