Blockchain technology firm Laguna Labs unveils testnet for its in-development “stablecoin,” which is reportedly a spin-off of stablecoin tokens, pegged to the cost of living over a fiat currency or a commodity, as reported by Cointelegraph.
According to Cointelegraph, through an October 24, 2022, announcement, Laguna Labs stated that the Nuon flatcoin is not like tokens tied with fiat currencies such as the United States dollar, on account of being pegged to the cost of living through daily on-chain inflation data. The firm highlighted that the idea was inspired from discussions and Twitter thread of individuals related to the sector such as Brian Armstrong, CEO, Coinbase, Vitalik Buterin, co-founder, Ethereum, and Balaji S Srinivasan, ex-CTO, Coinbase.
On the basis of information by Cointelegraph, in April, Frax France unveiled a consumer price-index (CPI) stablecoin called the Frax Price Index (FPI) which makes use of oracle data from ChainLink. Launched at approximately $1.02, the price reached an all-time high of $1.18 on July 19, 2022, but has been down 1.06% since that time to $1.05. Reportedly, the Volt Protocol (VALT) token also takes into account the CPI-tracking route. The Inflation Hedging Coin (IHC), launched in October, 2021, makes use of a burning mechanism based on the annual United States inflation data and monthly CPI rate to determine the asset’s burn rate, and increase its value over time. The Nuon white paper highlighted around the utilisation of an independent inflation index oracle for calculation of the Nuon peg daily and makes use of over-collaterisation and arbitrage to maintain the peg during the offset of inflation.
Moreover, Cointelegraph noted that the platform claims that the asset’s over-collateralisation will prevent it from falling from its peg. It is believed that annual US inflation rates have increased since the starting of the COVID-19 pandemic, which went from 1.4% to approximately 8.2% in 2022, insights from US Inflation Calculator showed.
(With insights from Cointelegraph)
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