The cryptocurrency industry is known for being volatile and unpredictable.
With the introduction of stablecoins, investing can be more of a sure thing, but what about flatcoins?
How are these newer cryptocurrencies useful?
And what is a flatcoin, anyway?
What Is a Flatcoin?
A flatcoin is a cryptocurrency pegged to the price of living.
However, a notable example is Nuon, the first-ever flatcoin.
Nuon is still in its testnet phase but seems to have potential.
It is expected to go live in the first quarter of 2023.
So, what’s Nuon all about?
What Is Nuon?
To use Nuon, you should probably deposit collateral because Nuon needs to remain over-collateralized to maintain its peg.
Once you deposit your collateral, Nuon can be minted for personal use.
Nuon is also decentralized, meaning its protocol is controlled by its community via agovernance process.
Nuon created something called the Truflation algorithm to adjust its price to current inflation rates.
This is the value point that all future Nuon pricing will be measured against and is recalculated daily.
Time will tell on this one.
But are flatcoins necessary?
What niche do they fill?
Why Are Flatcoins Needed?
When you hear of a crypto being pegged to another asset, you may think of stablecoins.
To better understand this phenomenon, let’s consider house prices.
In 1980, according toHudser, the average house price in the US was about $64,600.
To our 21st-century eyes, that figure may seem extremely low.
Regardless of the cause, inflation is bad news for society.
After all, nobody wants to pay more for the things they need.
In terms of cryptocurrency, inflation also has negative effects.
The same goes for all altcoins.
So, there’s still a need for traditional currency.
This means that cryptocurrency values are inherently linked to fiat currency value.
So, by nature, Bitcoin is not stable in value.
The idea behind flatcoins is to maintain a constant value, even in the face of inflation.
For example, say the price of apples is increasing over time (which it most certainly is).
So, theoretically, the apple will always be worth one Nuon.
Two apples will be worth two Nuon, and so on.
There’s no denying that the cost of living will continue to increase.
But flatcoins are designed to be directly linked to purchasing power.
Having a cryptocurrency that isn’t linked to fiat prices could be revolutionary.
And flatcoins may be able to help us here.
At the moment, all we can do is speculate.
