Flatcoins: The Stablecoin Killer

What are Flatcoins?

Flatcoins are the thing that go “bump in the night” for Stablecoin Maxis.

By definition: Flatcoin - Cryptocurrencies that are pegged to the costs of living, rather than fiat or commodities →

Flatcoins are often overcollateralized with RWAs & pegged to inflation itself, making them a guaranteed hedge against it. Due to this peg & overcollateralization, the value of the Flatcoin is never lost, typically being updated by the Truflation Oracle which captures the inflation rate in real time →

If inflation itself is consistently on the rise then it makes sense to tie your currency to it, right?

Of course, & Flatcoins are the catalyst for creating a logical system of economic sustainability through a currency tied to the the ever rising costs of living rather than the “empty backing” & rapid printing of our favorite paper bills with Mt. Rushmore’s residents residing on them.

To Stablecoin or Not to Stablecoin?

We’re aware that stablecoins are pegged to fiat currencies, which in theory, would make it another fiat currency? A currency tied to a currency that loses value over time would subject it to the possibility of losing value over time. Its the exact same thing but digitally recreated. Stablecoins are one regulation away from essentially being a CBDC, a government-backed promissory note essentially. These currencies are inflation-sensitive rather than inflation-resistant & are guaranteed to receive the short straw if ever there were any sort of economic crisis that affected the value of USD itself.

The Birth of Fiat - Stablecoin’s Predecessor

Fiat was born on a cold day ( not really ) in 1971 when President Nixon removed the convertibility of the US Dollar to gold in an effort to stop a gold run once post-war countries had amassed a significant amount of USD. The US held the majority of gold reserves & with an international circulation of USD on the rise, it became more appealing for foreign entities to redeem their gold in an effort to capitalize on it as the underlying asset of the currency they’d been trading freely. These fears arose as we saw a run on London’s gold reserve, pushing the price per ounce to a whopping $40 on October 20th, 1960. Temporary fixes were put in place to prevent these types of runs on gold but ultimately the depegging of convertibility became the surefire solution but ultimately it created a much larger problem in the process, inflation. Once the gold backing was removed from our beloved currency, it became fiat. A cascading ride down the slippery slope to inflation land.

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Historical data worldwide shows that inflation has gone up past 8% in non-extreme cases. Up to 19% in some countries ( terrifying to even think of ). Our current financial system is not prepared for this increase in the costs of living. Most currencies are prone to lose their buying power due to this. We see it every day with the increase of costs of goods but our money not being capable of keeping up, effectively demonstrating a loss of purchasing power.

Source: https://www.macrotrends.net/global-metrics/countries/USA/united-states/inflation-rate-cpi#google_vignette

Learn more:

How are Flatcoins any different from Stablecoins?

One is generally backed by tangible assets, the other is backed by our imagination. The end. Not just yet, as mentioned before, flatcoins maintain their peg by being over-collateralized by a multitude of assets. These assets can range from other cryptocurrencies like ETH, BTC, & Cardano ( just kidding, who actually uses Cardano lol), or RWAs (real-world assets). This term & concept was introduced by “ former Coinbase CTO Balaji Srinivasan and Sam Kazemian, the founder of the Frax stablecoin protocol, during a private conversation when they were discussing the idea of a stablecoin that would preserve the standard of living of its users. “

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The biggest value we’re seeing in this is that money is beginning to return to its original asset-backed state. While these currencies may not be redeemable for their backed asset, there remains the soundness in knowing there is visible proof of reserves for these flatcoins. Lets dive into a few different ones & explore their different models.

Nuon -

Nuon is a flatcoin built on Arbitrum with a current price of $1.015 & a peg of $1.019. It uses a “Quadruple Redundancy Peg Stability Mechanism**” ( say that fast 6 times in a row ). This means there are four different ways it is an inflation-resistant asset. As per its FAQ, here is each mechanism →**

1. The Nuon protocol algorithmically incentivizes users to mint or burn Nuon depending on market conditions, managing supply, demand, and the price of Nuon.
2. Overcollateralization protects the protocol and the peg. Each Nuon is always backed by collateral, with the protocol managing last-resort collateral liquidations.
3. An automatic Liquidity Pool feature protects the price of Nuon by preventing bad actors from draining the liquidity in the protocol ecosystem.
4. Arbitrage opportunities when the market price of Nuon diverges from the peg price accelerates the re-pegging process.

Get into the nitty gritty details here:

Here is an explainer:

ISC -

ISC (International Stable Currency) is sound money, hard money, money money ( you get where I’m going with this ). Its a flatcoin backed by a basket of RWAs & assets rather than just fiat currencies, these reserves even being visible to the public eye or skeptical investors. Try going to figure out the reserves for USD & tell me why your stablecoin is better, I’ll wait.

Currently sitting at $1.6 with a 7% APY & proof of reserves that protect it from Uncle Sam? We win.

Learn more about ISC here:

The Ultimate Conclusion

Throw Stablecoins in the trash, the meat grinder, the doggy poop bag, the stomach pit of the Lochness Monster, whatever works for you. Flatcoins are here to stay & the premise upon which they stand is one that guarantees their longevity. As a hedge against inflation, they’re a safer bet than the green goblins you have folded up in your wallet right now & a better option against insolvency than Stablecoins. Do yourself a favor & check out the above-mentioned Flatcoins & put yourself ahead of the curve.