Genki FS launches StatiCoin, a stable digital currency
Cryptocurrency, Bitcoin particularly, is growing faster than thought possible but it is still broadly seen as a speculative investment due to its highly volatile nature and ease of trading. The features that make it great for trading, make it terrible for merchants. Remember the story of the man who bought two Pizzas with 10,000 bitcoins? That's expensive pizza at today's BTC price. Most mainstream merchants aren't willing to take the risk that the currency will swing the other way and they will lose out after the sale of their product. What they really need is a digital coin whose value is fixed so that when a customer pays they can be sure they can redeem the coin for the same expected value.
Even traders are interested in stability so that they can safely withdraw funds from the market and buy in again at a lower price. One popular option used today is Tether which tries to meet this need by offering a coin “USDT” that is backed 1-to-1, by traditional currency equal to the amount of Tether issued. This sounds relatively straightforward but it requires understanding banking partners at a time when crypto is viewed with caution by the banking industry and requires the consumer’s trust in all of Tether’s processes. This is where we at Genki can differentiate, leveraging the value of distributed ledgers so that you don't have to place your faith in a company or individual, trust is implicit in the contract on the ledger.
Our solution, StatiCoin, is a fixed value coin that can be redeemed at the same value that it has been bought at. Merchants know that they can sell goods and receive payment at the agreed price with no variation. Traders now have a safe haven to park funds while they dip in and out of the market. But, I hear you say "This is too good to be true. How have you achieved this?" The answer is the concurrent launch of RiskCoin where traders/investors are able to speculate on the currency variation that would otherwise be attributed to a standalone StatiCoin.
To help explain how this works let's take a couple of examples, starting off where the quantity of each coin is in perfect equilibrium. StatiCoin and RiskCoin can be purchased with Ethereum (ETH). The prevailing ETH price is €200 and €2,000 Euros worth of both StatiCoins and RiskCoins have been bought. This results in a total of 20 ETH in the contract, 10 ETH each of StatiCoin and RiskCoin.
ETH Price = €200
Market conditions have been great and the ETH Price has doubled from €200 to €400. The value of StatiCoins as the name suggests is static so €2,000 of StatiCoin is now worth 5 ETH. As the value of ETH in the contract is 20, the remaining ETH are attributed to RiskCoin. This means that there are now 15 ETH for RiskCoin at €400 each making the value of RiskCoin €6,000 – three times the starting value. This feature is important, as it shows that investing in RiskCoin is better than simply investing in ETH (when predicting a price rise).
ETH Price = €400
Things of course can go the other way, now the ETH price halves from the original €200 to €100. The value of the StatiCoins must remain the same so €2,000 of StatiCoin is now worth a total of 20 ETH. As there is only a total of 20 ETH in the contract, RiskCoin is now allocated 0 ETH and therefore has a price of €0.
ETH Price = €100
The fact that the price of RiskCoins can go to zero means there are rules in place to ensure that new StatiCoins can’t be created when the RiskCoin price is 0 or when leverage is too high, ensuring that StatiCoins have sufficient backing.
I know you’re interested in knowing how you can be part of the ICO – sorry to disappoint but there isn’t one and we’re not looking for any backers, although by purchasing RiskCoins for yourself you will implicitly be allowing more StatiCoins to be created. We don’t believe that this service has room for a middle man to extract value so we’re releasing this as a demonstration of what Genki FS can do.
Interested in finding out more?
Whitepaper, StatiCoin / RiskCoin, GitHub, Kovan
Mainnet
USD_S USD_R EUR_S EUR_R CAD_S CAD_R GBP_S GBP_R JPY_S JPY_R
Who are we?
Dr. Paul Edge - Co-Founder, Vision, Mathematician
Peter Cornforth - Co-Founder, Product, Growth
Creating coins using Metamask
Requesting staticoin worth 0.02ETH = 6 USD
StatiCoins are delivered after a 24 hour delay
Requesting USD riskcoin worth 3ETH
RiskCoins are delivered a 24 hour delay
The 5 currencies currently covered are USD, EUR, GBP, CAD, JPY
All staticoin ethereum addresses are of the form [Currency Code].staticoin.eth
All riskcoin ethereum addresses are of the form [Currency Code].riskcoin.eth
Leaving out the currency code defaults to USD.
Welcome to steemit with this interesting concept. So you need the same amount of money to be invested into risk to emit Stati ? and what happens if the ether go down from $300 to $30 ?
Thanks for the welcome!
Good questions. This example is slightly simplified. We've set the contract so initially there is a 3:1 , riskcoin:staticoin ratio so staticoin holders are covered for 75% falls down to $75/ETH below this point riskcoin have a 0 price and cannot be redeemed, but staticoins can always be redeemed on a first come first served basis (i.e. until the money runs out).
The price reference is a 24 hour average from Kraken, so flash crashes/whale sales shouldn't have an effect, but a long period of low ETH price would mean that most staticoin holders would withdraw their funds.
These contracts control volatility, but do not protect against a full scale crash of ETH. In fact, no ETH backed contract would protect against this type of event.
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