The first crypto linked to the cost of living

by Arthur · October 25, 2022

Flatcoin: A project that aims to beat inflation is centered around a stable coin tied to the cost of living. Is it the answer to rampant inflation? Or could it be another Terra-like circus?

Blockchain development company Laguna Labs has launched a new crypto called Nuon. They say it is the world’s first over-collateralized and decentralized “flatcoin”.

The idea is that Nuon is an inflation-resistant coin, designed to protect purchasing power. So in an ideal word, with a flatcoin, a burger bought today will be the same price as a burger bought five years from now.

Here is the explanation.

Laguna Labs says: “Unlike most stablecoins that are pegged to depreciating assets such as the US dollar, the value of a Nuon flatcoin is based on daily objective, authentic and on-chain inflation data. This means that a Nuon’s purchasing power remains constant, or flat , from the moment it is bought until it is sold.”

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Nuon test net

If you want to have a play, you can test the Nuon embossing mechanism. The protocol’s first test net is here. Developers and enthusiasts can be early adopters and perhaps be part of the growth (or demise) of the new project.

Stefan Rust is CEO of Laguna Labs. “For too long, crypto has relied on centralized, depreciating assets for its stablecoins. Not only has this brought concentration and counterparty risk, but it’s simply not an accurate reflection of people’s lives. Nuon provides a viable alternative to this system and is the first the cryptocurrency that solves a massive problem in the real world today: inflation. Fully decentralized, over-hyped and censorship-resistant, Nuon is the first digital asset that aims to help people preserve their purchasing power.”

Flatcoin vs stablecoin

Inflation is running rampant worldwide, and fiat is falling rapidly. Laguna Labs says flatcoins have been the topic of conversation by several blockchain founders.

Balaji S. Srinivasan, ex-CTO of Coinbase, explored the flatcoin concept in a series of Twitter threads. He saw it as a way to avoid the weakening of the US dollar in stable digital assets.

If you try to implement a flat coin yourself – a non-fiat coin whose exchange rate remains flat against a basket of N goods – you immediately find that you need reserves to maintain this link across N order books.

So where do these reserves come from? https://t.co/mMoPnhxtm0

— Balaji Srinivasan (@balajis) 4 September 2021

Ethereum founder Vitalik Buterin said in a recent podcast that cryptocurrencies should be ready to free themselves from an over-reliance on any one asset. This is to avoid potential concentration, as well as to avoid regulatory risks. Buterin said a link to an objective consumer price index could be an option.

Brian Armstrong is the founder of Coinbase. He said: “In the crypto economy, I think we need to have a currency that is not tied to fiat. We have USD Coin which is backed one to one by the dollar, and then we have decentralized stablecoins like DAI, but it would be nice to have a stablecoin , like a flatcoin, which is tied to purchasing power. Like, every coin buys you a McDonald’s hamburger today, and hopefully, five years from now, one coin will still buy you a McDonald’s hamburger.”

Could this be a new way to beat inflation? Or is it another algorithmic promise that burns to the ground? We will keep you updated.

Do you have something to say about Nuon flatcoin or something else? Write to us or join the discussion in our Telegram channel. You can also catch us on Tik Tok, Facebook or Twitter.

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