Blockchain tech firm Laguna Labs has launched a testnet for its in-development “flatcoin” — a spin-off of stablecoin tokens — pegged to the cost of living rather than a fiat currency or a commodity.
In an Oct. 24 announcement, Laguna Labs said that the Nuon flatcoin is unlike tokens tied to fiat currencies, such as the United States dollar, as it is pegged to the cost of living via “daily unbiased, authentic, and on-chain inflation data.”
The firm said the idea is inspired by discussions and Twitter threads from big players in the space, such as Coinbase CEO Brian Armstrong, ex-Coinbase CTO Balaji S. Srinivasan and Ethereum co-founder Vitalik Buterin, who all call for alternative ways to peg an asset so that it maintains its purchasing power over time.
However, while the concept of an inflation-linked crypto token is not new, it remains relatively untested.
In April, Frax Finance launched a consumer price index-tracking (CPI) stablecoin called the Frax Price Index (FPI) that utilizes oracle data from ChainLink.
Launching at around $1.02, the price hit an all-time high of $1.18 on July 19 but is down 10.6% since then to $1.05. Given the asset is less than a year old, it is hard to judge its success in beating out inflation rates until more time has passed.
The Volt Protocol (VALT) token also follows the CPI-tracking route, but its price history is hard to come by as platforms such as CoinMarketCap and CoinGecko are not actively tracking the asset. It is not listed on any major exchanges like Binance and Coinbase.
There is also the aptly named Inflation Hedging Coin (IHC), launched in October 2021, which utilizes a burning mechanism “based on the annual United States inflation data” and monthly CPI rate to determine the asset’s burn rate and, in theory, increase its value over time.
However, a person snapping up IHC a year ago will see the value of their holdings fall as much as 96.4% as of today, according to data from CoinGecko, with IHC priced at $0.00009529 at the time of writing.
The Nuon white paper states that it utilizes an independent inflation index oracle to calculate the Nuon peg daily and uses “over-collateralization and arbitrage to maintain the peg while offsetting inflation.”
It also claims that the asset’s over-collateralization will stop it from falling from its peg. However, it is unclear how well that theory holds up if the value of the collateralized assets were to tank significantly.
Details are sparse on the testnet, but the firm states that people can now use the testnet to try out the Nuon flatcoin’s minting mechanism.
Annual U.S. Inflation rates have surged dramatically since the beginning of the COVID-19 pandemic, going from 1.4% to around 8.2% in 2022 according to U.S. Inflation Calculator.
As such, the purchasing power of the USD has taken a significant hit with the general price of goods and services continuing to increase.
Crypto, and particularly stablecoins have also been an important tool for citizens in countries dealing with significant inflation and economic trouble.
AAVE and Tezos XTZ arrive on commission-free trading platform Robinhood
(Ekta Mourya – FXStreet)
– In the bear market where most cryptocurrencies have outperformed Bitcoin, Robinhood announced the listing of AAVE and XTZ.
– Robinhood users now have access to 19 digital assets that can be traded commission-free on the platform.
– Both AAVE and XTZ prices declined nearly 75% over the past year, struggling to make a recovery.
Bitcoin has been outperformed by most altcoins in the current bear market. AAVE yielded 11% gains for holders over the past thirty days and the peer-to-peer transaction token XTZ has started its recovery. Commission-free trading platform Robinhood has listed both these cryptocurrencies on its exchange.
Robinhood lists AAVE and XTZ, pushes altcoin adoption higher
Robinhood, a commission-free stock trading and investing application has listed two new cryptocurrencies AAVE and Tezos XTZ on its exchange platform. AAVE is a token for an open source liquidity protocol and Tezos XTZ is a cryptocurrency used for peer-to-peer transactions. Both are now available to trade for 15.9 million monthly active users on Robinhood.
The listing of the two new cryptocurrencies is a key step in driving their adoption higher as the commission-free exchange platform draws a wide audience of crypto traders. Robinhood has 22.8 million funded accounts, bringing AAVE and XTZ to a wider audience of traders.
Over the past thirty days, Bitcoin price has remained largely unchanged. At the same time, AAVE yielded 11% gains and XTZ price declined 8%. The peer-to-peer transaction token XTZ started its recovery on October 24.
Robinhood Markets, the trading app of the commission-free exchange now features a total of nineteen cryptocurrencies including Bitcoin, AAVE and XTZ.
Both AAVE and XTZ prices are down 75% over the past year. The open-source smart contract platform Tezos recently announced its partnership with Shopify. The new partnership and Robinhood listing could fuel a recovery in the peer-to-peer transaction token XTZ.
Analysts predict 10% drawdown in AAVE
Noobietrade, a pseudonymous crypto analyst applied the Elliott Wave Theory on AAVE-USDT price chart and predicted that wave five could send AAVE price shooting to $92.5. The ABC correction following the end of wave five however could see a correction in price. The analyst says that on completing A, B and C, a 10% drawdown from the current level of $83.24 to $74.1 is likely.