written by Vontarius F
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 →
Flatcoin Definition | CoinMarketCap
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.
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.
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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