Rebase tokens are a kind of cryptocurrency that adjusts their circulating provide in response to cost fluctuation. This may be achieved through burning or minting tokens through the community to make sure value stability with out affecting the worth of a person’s holdings.
These tokens exist as a option to keep away from crypto value volatility whereas nonetheless providing the advantages of cryptocurrencies, similar to decentralization and world use. Nevertheless, they’ve a number of key failings.
For one, rebase tokens require energetic enlargement of the protocol’s treasury with the intention to stay worthwhile. This causes some protocols to pursue irresponsible lending fashions, which, whereas worthwhile, incite cascading liquidations when losses compound on market strikes to the draw back. That is terribly unlucky for not solely the overwhelming majority of traders however for the groups left working tasks throughout occasions of poor market sentiment.
Many of those tasks, constructed on the rebase token philosophy, exist as Fantom-powered Olympus DAO (OHM) forks (right here, fork means “to repeat”). Nevertheless, because the failings of this philosophy proceed to look, some imagine OHM forks are dying off. One startup, FantOHM DAO, claims the alternative and goals to repair the issues related to rebase tokens of their present state.
Constructing utility
FantOHM is a decentralized reserve foreign money protocol primarily based on the Fantom FTM token, with the FantOHM different referred to as FHM. Basically, each FHM token is backed by tokens throughout the FantOHM treasury, which means that FantOHM offered belongings have an intrinsic worth to be primarily based on.
Nevertheless, FantOHM belongings aren’t tied to the precise worth of the FHM token and might respect or depreciate algorithmically, similar to a typical rebase token. Ideally, this implies FHM would be capable of exist and maintain its worth whereas ignoring volatility.
Whereas FHM is nice for managing a fluctuation in worth, the asset doesn’t have a lot utility outdoors of that. To unravel this, the FantOHM crew designed a stablecoin referred to as USDB. USDB is an asset that’s created each time an FHM token is burned.
Because of USDB, customers can nonetheless have the worth of their belongings held within the FantOHM treasury whereas benefiting from the utility supplied by USDB. Because the stablecoin is created each time an FHM token is burned, an FHM token is minted each time a USDB token is burned. By offering an alternate foreign money in USDB, FantOHM DAO is actually giving their platform a enterprise improvement arm with its personal funding quite than changing the asset solely.
Creating one thing new
The FantOHM crew is difficult at work constructing its protocol and the USDB token alongside it. They’ve launched the product whereas holding its core crew of founding members, launched a secondary, cross-chain appropriate protocol that has elevated person publicity to the Moonriver community, and are actually launching the USDB stablecoin.
All previous, present, and upcoming modifications have and will likely be agreed upon by the challenge DAO, guaranteeing all monetary choices are determined upon by the group. 96% of the DAO’s members are invested wherever from $1,000-$5,000 into the community, and FantOHM DAO can be the primary Protocol Owned Liquidity ecosystem to spend money on nonfungible tokens (NFTs) related to the challenge’s enlargement.
The crew will proceed to develop its imaginative and prescient over the approaching months alongside assist from its latest companions such because the Yoshi Trade, the Clandestina Gang, Beets.fi and Liquid Driver.
“In a panorama of infinite recreation gamers, FantOHM DAO is the Berkshire Hathaway of its friends,” says a member of the crew. “We spend money on tasks that present deep-value use circumstances for the way forward for cyber safety, income manufacturing, and equitable enterprise account administration.”
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