July 16, 2021, | AtoZ Markets – Cryptocurrencies, while offering a new system of financial freedom and a counter against inflation and erosion of wealth, are faced with a fundamental challenge. As crypto assets become progressively expensive, holding on to them is good. However, ultimately, a person will need to convert it to fiat for real-world use.
This leads to a dilemma that people would rather avoid. Traditional money is renowned for its central control where the authorities can create as much money as they desire, eventually triggering inflation. A case in point is the American Rescue Plan Act of 2021, which injects $1.2 Trillion into the economy: money that the government mostly doesn’t have and is being created by the Federal Reserve, leading to a sharp rise in inflation.
The Standard: Don’t Sell But Borrow
The Standard is a DeFi infrastructure that acts as an alternative global bank and leverages the power of smart contracts to let people gain access to liquidity without the need of selling their assets.
Rising inflation pushes people to invest in different assets that rise in value over time. Precious metals, like gold and silver, have always been a preferred method and now cryptocurrencies have been added to the mix. Saving money through traditional means is a sure-fire way of losing value. Even the most stable of all currencies, the US Dollar, is inflating at a rate of roughly 5% in 2021.
If people sell off their savings for regular currency, they will pay more when they want to get the value of their initial savings back. This is where The Standard platform comes in and offers a way for people to have access to a digital alternative of traditional currencies and still retain their assets.
The Standard does this by creating a DeFi platform that uses smart contracts to let people instantly borrow different stablecoins against their digital or physical savings or assets. Since smart contracts are used, the borrowers are offered lower interest rates than banks and when they return the stablecoin along with the interest, the smart contracts instantly release their collateral.
This way, people are able to access the liquidity they want and still retain their savings.
S-EURO: The Standard EURO Pegged Stablecoin
S-Euro is The Standard’s generated algorithmic stablecoin that is mathematically pegged to the EURO. People can deposit their digital assets or digital ownership of physical assets such as gold in native smart contracts and acquire the stablecoin. From there, the borrowers have the option to use it digitally or sell it off in the market for fiat and use it for their purposes.
As long as the interest and the principal amount is paid in time, the locked collateral is safe. Once the repayment is completed by depositing the required S-EURO back in the contract, the assets are released back to the borrower.
Stablecoins, while not offering an increase in wealth are handy for day-to-day transactions as they retain their value against fiat. Stablecoins have gained much demand lately with even the US authorities integrating them into their banking network.
The Standard Token and Governance
While The Standard offers a cheaper and better alternative to retail banking, it also helps people fight off inflation through its native Standard Token. As a deflationary token, there will be only 1 billion of these. Holding on to the tokens can benefit users, although TST has no fixed value and will remain subject to market volatility.
Along with its deflationary properties, the Standard Token offers a range of other benefits:
- Governance: The Standard operates as a decentralized autonomous organization, giving Standard Token holders voting rights for different additions and features of the platform.
- Liquidation Acquisition: Unpaid loans will have their collateral liquidated or offered up to Standard Token holders to acquire below spot price.
- Fee Discount: Up to 50% discount on the protocol’s fee is offered if the fee is paid through Standard Token.
Backed by partners, including Vaultoro, a crypto and bullion exchange, The Standard is set to create a whole new retail banking stream for people worldwide.