Flatcoin

A flatcoin is a stablecoin that grows together with inflation, unlike regular stablecoins that are pegged to the nominal value of currencies (and are not inflation-adjusted). Flatcoins are pegged to the cost of living. This could for instance be measured through the Consumer Price Index, or a basket of various assets.

The purpose of the flatcoin design is to enable token holders to maintain their purchasing power. It could arguably be more valuable than standard stablecoins because it offers a greater return on investment to its holders. Several flatcoin projects rose to prominence around a time when inflation was beginning to rise drastically in 2021. These include FRAX’s Frax Price Index and Truflation.

Inflation continues to impact citizens globally, particularly those in the lower income bracket. The effects of this is pronounced as wages have not risen to match the rise in inflation. Effective implementations of flatcoins could therefore have a major impact on the real world, and make crypto more relevant and accessible to a wider audience.

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