The post-COVID-19 period has introduced the difficulty of inflation to the forefront, resulting in growing curiosity inside the Web3 area for creating flatcoins, an in depth “cousin” of stablecoins designed to mitigate inflation danger.
Many current flatcoins, like Terra’s TerraUSD (UST) stablecoin, are algorithmically backed and due to this fact function a stark reminder of the dangers related to algorithmic backing, as demonstrated by the collapse of LUNA and UST. So, whereas the concept behind flatcoins could seem interesting, they elevate vital reservations conceptually and by way of design. Finally, the success of flatcoins will depend upon whether or not builders can ship on their promise.
Peter Han holds a Ph.D. in finance from the College of Illinois Urbana-Champaign, concentrating in monetary intermediation and fintech, along with a grasp’s diploma in monetary engineering. He holds a BA in English and BS in arithmetic from China’s Tianjin College. He labored for PwC in Beijing earlier than becoming a member of IoTeX, the place his work focuses on tokenomics-related analysis aimed toward enhancing IoTeX’s tokenomics design.
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