Stablecoins have evolved to insulate crypto investors from token price volatility, or at least the perception of it. MahaDAO is one of the first platforms to see that fiat-linked stablecoins aren’t really that great for ensuring buying power, at least on a time frame of more than a few months.
The ARTH token ecosystem is the solution to this problem, and it is a well thought out platform that could change the way investors see value.
When people think about the price of the major crypto tokens, like Bitcoin or Ethereum, the idea of a volatile asset class might pop into their minds. While this is partially true, the direction of crypto prices has been up ever since they were introduced to the public.
Long term crypto investors probably love this, but anyone who has to pay for daily needs with cryptos isn’t in the same position.
The answer to this discrepancy between short-term volatility and long-term appreciation has been fiat-linked stablecoins, but this isn’t a perfect solution. There is zero doubt that the value of fiat currency drops over the long term, and the price of useful goods rises in fiat currency terms.
When then-US President Nixon ended the gold standard in 1971, an ounce of gold sold for $35 – now an ounce of gold costs more than $1800. Clearly, using fiat currency to balance the volatility in the crypto markets is a very poor idea in the long run.
People feel comfortable using fiat currency because large, fast losses of buying power are rare (at least in some cases), and the price of day-to-day necessities are relatively stable. On the other hand, over time, the use of fiat currency or a fiat-linked stablecoin is a poor idea, as the losses from this asset are guaranteed.
MahaDAO has Novel Solution to the Stablecoin Dilemma
MahaDAO has created the infrastructure to support the ARTH token, which is a valuecoin that is backed by a basket of non-correlated assets. While a fiat-linked stablecoin is subject to the price changes of the underlying fiat currency, ARTH’s value can’t be influenced by a single asset – which makes it a far better volatility hedge in the medium and long-term.
Here are a few of the things that make ARTH a great financial tool:
Stable (non-fiat) Value
The ARTH token is backed by assets that are tied to a Global Measurement Unit (GMI). This isn’t a new idea, but MahaDAO is the first platform to create a token that is founded on a multi-asset basket that will insulate investors from both fiat and crypto volatility.
Preservation of Buying Power
Fiat currency is a terrible way to store value, as central banks inflate the currency supply on a regular basis. More currency chasing fewer goods means less buying power, especially for smaller economic actors who don’t have access to effective hedging strategies. ARTH solves this and allows both small investors and larger entities to gain access to the same tools.
Fair Distribution of Wealth
As a DAO-based ecosystem, the ARTH token puts the community in charge. Not only will more actors have a say in how the system is operated, but the level of transparency is also much higher than one would find in the established, centralized financial system.
Making a Solid Idea Reality
At the Bretton Woods conference in 1944 economist Benjamin Graham proposed that instead of using a global gold-backed currency, which was the final plan by the West, the world should use a currency that is backed by a group of raw materials. An approach that uses multiple assets is likely superior, as price movements in a single market can’t create large value changes in a reserve asset.
Graham’s plan never caught on, but now, MahaDAO is creating a modern version of this idea. When a person holds a token that derives its value from non-fiat assets, they are largely immune from medium and long-term fiat devaluations. ARTH is also impossible to ‘print’ like fiat currency, as it is founded on a range of assets that can’t be created at will.
ARTH has a vault that is the direct owner of collaterals that give the token its value. The team at MahaDAO has selected a range of assets for the vault, and it is actively managed. For now, the team at MahaDAO is managing the vault, but as the ecosystem evolves, this work will likely become one of the ways that the community manages its interest in the platform.
One of the reasons why this kind of currency hasn’t come to the market sooner is due to the fact that central banks have been able to more-or-less manage prices in developed economies over the past few decades (excluding the 1970s), but this period of relatively stable price appreciation is likely coming to an end.
Perfect Specs for Retail and Institutional Use
In addition to being founded on solid value principles, ARTH also addresses some of the challenges that early token platforms have struggled with. The token can be sent or received with a transaction time of fewer than three seconds and is basically free to use due to meta-transaction architecture.
In short, it has the perfect spec sheet for small transactions, and can also be used by large investors as a store of value. ARTH can also be used across multiple chains, with all the benefits of deep liquidity that come with that functionality. Staking will also be supported and is being used to reward early adopters.
MahaDAO first developed a token called LAxmicoin, which was aimed at the Indian market. Unfortunately, the project met with regulatory issues, which lead MahaDAO to continue research on the platform it is launching now.
As a result of the company’s extensive development experience, it was able to create features for the MahaDAO platform, and ARTH token that makes it a great fit for retail-level use. India is one of the largest unbanked markets on earth, and these kinds of low-cost tools that allow for fast, zero-cost transfers are a great solution for an underbanked population.
A Great Team
The MahaDAO foundation has some great people behind the platforms and token it is releasing.
Here are a few of the most important people at the foundation:
Steven Enamakel
Steven has a background in computer science and math and was educated at the University of Toronto. He has worked as the VP of Products and Blockchain at Intellibuzz, and is the CEO of MahaDAO. Steven also founded Vezures, a blockchain development company focused on creating blockchain platforms like Ethereum, EOS, Hyperledger, or Fabric.
Pranay Sanghavi
Pranay built Intellibuzz whose products have boosted revenues and created hard cash savings for more than 7000 small businesses and over 100 corporate companies, some of which are in the Fortune 500. Pranay graduated from Stanford’s Graduate School of Business with an education in entrepreneurship and entrepreneurial studies.
Gafoor Khan
Gafoor is leading the Growth team, CryptoControl, one of India’s most popular crypto startups. He has a Google Ads Search Certification as well as Google Analytics Individual Qualification. Gafoor has a background in digital marketing, social media marketing, and creating content marketing strategies.
Conclusion
Not only does the team at MahaDAO have some great ideas, but they have also shown that bringing their ideas to life is possible. If you want to learn more about MahaDAO and the ARTH token, please click here to read the white paper.
The post Meet MahaDAO & ARTH: A Decentralized Algorithmic Stablecoin Platform appeared first on Blockonomi.
December 17, 2020 at 07:48AM https://blockonomi.com from Blockonomi https://ift.tt/38awqRu
Comments
Post a Comment