The advent of cryptocurrency and blockchain have paved the way for the creation of blockchain-based solutions for anything from voting systems to ridesharing to cloud storage solutions. It seems that with the blockchain, the possibilities are endless. With this new technology comes new challenges that must be addressed to facilitate adoption for both businesses and consumers. Market volatility has emerged as a major barrier to widespread adoption of cryptocurrency, which has led to the development and increasing popularity of a category of cryptocurrency called stablecoins. This class of crypto is intended to produce a digital currency that performs more like our money does today, with predictability (stability) of its liquidity and value. As of writing, there are around 300 stablecoin projects either in development or in circulation today using variations of three dominant methodologies to achieve this nirvana of stability. But many of the models that promise stability are struggling with it, and many solutions will be short lived as cryptocurrency becomes more mainstream and governments provide their own versions of a digital ‘stable’ currency.
Taking a deeper dive into stablecoins, we found a refreshingly simple yet sophisticated solution offered by not-for-profit Element Zero Network, which is not just a stablecoin but an actual platform for other companies to launch their own stablecoins.
Many of the stablecoins available today that we looked at are centralized, which creates vulnerability hence, their stability is questionable. While there are decentralized models in play too, we see a different set of challenges that they must address. Lastly, we saw SEC’s Senior Advisor for Digital Assets Valerie Szczepanik recently comment that all stablecoins may be securities. This puts many of the algorithmic stablecoin solutions out there in danger of non-compliance with the US Securities law, which introduces more uncertainty to space.
Element Zero Network is payment network and stablecoin creation platform that is supported by a unique new methodology to deliver coin stability. Not only does Element Zero’s model provide stability against market volatility but it also addresses inflation, which is something rarely discussed or addressed by existing stablecoin models.
Stablecoin Benefits for Consumer
Let’s start by looking at what benefits this model presents to consumers:
Short Term Holding: Consumers and investors need not worry about the dangers associated with a crypto crash, as the stablecoin’s stability protocol ensures the coin is protected against volatility and crypto crashes, as it is typical (today) for surges to happen in the crypto market.
Long Term Holding: People hedge funds with precious metals, hence, the funds can be there for a long period without losing value. The stablecoin is enhanced, and designed to be protected against any form of inflation. Thus, it becomes a perfect stablecoin for hedging.
Benefits to Stablecoin Partners
Well, let’s start with the obvious; Element Zero doesn’t charge organizations who choose this platform to launch their stablecoin. Element Zero’s revenue is a split share (75% to partner, 25% to EZ). Partners are able to build their stablecoin with Customized Features, such as variable fees and offers, rewards and so on….using their SDK, the possibilities are limitless. By incorporating the stablecoin into their payment options partner will have increased revenues (since they retain three quarters of the fees) as well as increased cash flow thanks to instant settlements of transactions. Partners will also benefit from being able to develop loyalty and/or rewards programs for their stablecoins, strengthening their hard earned relationship with their customers.
Element Zero’s turn-key solution addresses both inflation and stability in the market. The platform is doing something that based on our research so far, no other blockchain-based platform has done. It is offering users a free service that will allow businesses, organizations, and even other nations to create and launch their own stablecoin that is not only stable in volatile market conditions but a stablecoin that protects long term purchasing power by not being impacted by inflation.