These blockchain based assets known as stablecoins, are digital tokens which are pegged to another asset. This pegging usually links the digital assets to FIAT currencies on a 1:1 basis, attempting to mimic their stability.
The entire purpose of these assets is to provide investors with a blockchain based form of payment, while experiencing a reprieve from the volatility often associated with cryptocurrencies.
These qualities have made stablecoins perfect for use in STOs/DSOs, which have been seen various times, to date.
While most stablecoins to have hit the market are pegged to FIAT currencies, there are various options that have attempted to capitalize on the stability of non-conventional markets. Unfortunately, for those going down this road, most have been viewed as gimmicks, or outright scams. The following are two examples of stablecoins based on non-conventional reserves. One with potential, the other a scam – be diligent when utilizing such assets.
Outside of Crypto, one of the hottest industries is the Cannabis market. With legalization taking place throughout the nation of Canada, as well as various states, acceptance of the industry has never been higher. Strengthening the case for Cannabis is its ability to affect change in, both, recreational and medicinal capacities.
Recognizing this, billionaire Alkiviades David has recently announced a stablecoin to be backed by hemp flower. This stablecoin is a BTC based token which is known as SWX Coin. Strengthening the case for its adoption is the intent of the Swissx Global Hemp Exhange to create secondary markets for the trading of this coin.
This particular offering took place as an ICO in 2018, and was widely viewed as an outright fraud. Korean firm, ‘Shinil Group’, sold tokens to investors which were to function as a stablecoin, backed by gold found in a shipwreck.
Operations were eventually raided by local authorities, and it came to light that the Shinil Group had no idea if these gold reserves even existed.
A growing trend seen in 2019 is the advent of crypto-based savings accounts. Leading the pack, among the various offerings on the market, is BlockFi. Facilitating services offered by BlockFi is, none other than, Gemini. The Winklevoss run outfit provides custodial services for assets invested through BlockFi – bringing clout and reputability through the affiliation with a licenced and respected third party.
Recognizing the importance of stablecoins alongside assets such as Bitcoin, Ethereum, and others, BlockFi naturally supports the Gemini stablecoin, GUSD.
In a recent update to their service terms, BlockFi announced that investors trusting them with their GUSD will receive 8.25% returns on a monthly basis. This outpaces many well managed mutual funds, making this option a very attractive options for investors.
Offerings like this show a real world benefit to investors, that has actually been realized. BlockFi in particular has paid out tens of million in interest over the past few months, moving them beyond the promise phase, and on trend.
Despite the woes, which have plagued Tether over the previous year, the stablecoin market is still dominated by the controversial offering.
While current market dominance by Tether is still strong, alternatives have clearly taken a chunk out of their business. Within the last year, we have seen Tether’s share of the stablecoin market drop from >95% to roughly <75% – a significant drop, showing demand for alternatives.
Tether vs The Pack
We recently took a deeper look at the perception and operational issues being experienced by Tether, and the various options on the market for replacing it. Make sure to check out the following article to learn more about these alternatives, and how they vary from industry-leading Tether.
While one of the stablecoins discussed in the aforementioned article may one day prove to win out as the industry darling, the reality is that the yet-to-be released Facebook tokens, Libra, have the best opportunity to do so. This is due to the sheer exposure and influence that Facebook holds over various markets.
The average person prizes convenience over all else. While there are many that are voicing their displeasure and apprehension towards the Facebook product, to date, when the tokens are eventually released, there will be a pre-existing pool of clients gaining access that simply don’t care about past privacy and security lapses.
Regardless of which stablecoin eventually wins out, there are various viable options out there from reputable companies. Right now, industry participants are spoiled with the amount of competitors, as many attempt to carve out their place within crypto – some gimmicky, some on trend.
Siemens to Tackle Green Energy with Swarm Capital
Clean and renewable energy: The concept is simple, however, the execution is anything but. In an effort to aid the continued development and adoption of sustainable energy, worldwide tech giant, Siemens, has turned to a popular blockchain service provider – Swarm.
Today, this pairing of companies announced that Swarm has been tasked with developing an efficient, and effective, solution to facilitate the funding of energy projects in Africa. This task will be completed through use of the company’s recently announced premium tokenization service, Swarm Capital.
While details regarding the partnership are still scarce at this time, this is most definitely a positive announcement. Not only does it mark continued early adoption of Swarm Capital, but also the entrance of a global titan of industry in Siemens, into the world of blockchain.
Announced mere weeks ago, Swarm Capital is a service provider platform, offering premium services through a modular platform. This platform, which is built on the Swarm protocol, is meant to be a comprehensive solution for any company looking to tokenize an asset.
In their partnership announcement, the team at Swarm took the time to comment on why blockchain is a good fit with future energy solutions through Siemens. They stated,
“One of the most compelling use cases for tokenization is in the energy sector, which has been brought to the fore lately in public discussions concerned with energy accountability, transparency, and sustainability. The energy industry is abundant with potential use cases — from the tokenization of energy itself to the digital representation of carbon emissions.”
Swarm is a U.S. based company, which was launched in 2018. In the time since, the team at Swarm has developed a myriad of services and solutions for the digital securities sector, including specialized token standards, open protocol, and more.
Cofounders, Philipp Pieper and Timo Lehes, currently oversee company operations.
Founded in 1847, Siemens has withstood the test of time, establishing themselves as a world leader in manufacturing and tech industries. The company has done this by continually looking towards, and planning for, the future – as evident by the partnership described here today.
CEO, Joe Kaeser, currently oversees company operations.
In Other News
For a few years now, we have seen various companies attempt to integrate green energy and blockchain. We have, in the past, detailed multiple companies that fall into this camp. While integrating blockchain and green energy in a different manner than the development discussed here today, the following articles demonstrate another avenue in which the two sectors can coincide.
CoinShares Issues Gold-Backed DGLD Tokens
CoinShares made a splash across the tokenization community this week after announcing a new gold-backed token network. The network will allow investors to take advantage of the stability of gold, whilst still enjoying the added security and efficiency of a blockchain-based system.
How CoinShares New Platform Works
According to CoinShares’ executives, each token represents physical gold. To be exact, each DGLD token is backed by 1/10 Troy ounce. This gold is held by one of Switzerland’s premier precious metal traders MKS SA.
MKS SA – Swiss Precious Metals Trader
For their part, MKS SA will hold the gold reserves and allow for third-party auditing to occur. In total, the firm put aside just over $20 million in gold for the tokenization strategy. Notably, MKS SA already hosts a large precious metal trading network. Consequently, tokenizing their gold provides far more liquidity than traditional EFTs.
Speaking on the new tokenization strategy, CoinShares’ Chairman, Danny Masters explained the advantages of the maneuver. For one, gold is considered one of the most stable assets on the planet. Now combine that stability with the security of a blockchain network, and you get a frictionless trading system that has the capabilities to function internationally.
Eliminates 3rd Parties
Masters also discussed how CoinShares eliminates many of the third-party verification systems encountered when investing in Gold EFTs. Each of these verification steps adds costs and time to the total transaction. Now investors can eliminate these delays and save money on fees.
Gold on Bitcoin Blockchain – CoinShares
CoinShares decided to utilize the Bitcoin blockchain as its core anchor for the platform. This was a smart strategy as Bitcoin is the largest and most secure blockchain on the planet. To make the concept a reality, CoinShares incorporated CommerceBlock’s Ocean sidechain.
Sidechains Are the Biz
Sidechains such as Ocean, Liquid, or the Lightning Network allow users to conduct faster transactions with fewer fees. Also, these second layer protocols enable developers to utilize additional functionalities not found on the original Bitcoin blockchain.
Smart contracts are a perfect example of how sidechains benefit Bitcoin. Technically, Bitcoin’s blockchain can handle smart contracts but it’s far less capable than the robust capabilities found in the Ocean sidechain.
Partnered with BTC Wallet Provider – Blockchain
Another key component of the venture is a strategic partnership with the crypto wallet provider Blockchain. Blockchain needed to create a means for investors to store their gold-backed crypto easily and efficiently.
CoinShares’ new gold-backed token is open to both retail and institutional investors. Currently, the product is available in 200+ countries via Blockchain’s crypto exchange – PIT. Notably, the platform requires AML and KYC adherence as part of the company’s regulation-friendly approach to the market.
CoinShares is ready to provide clients with a stable alternative in the crypto sector. The firm has years of experience connecting traders with profitable tokens. Now, CoinShares wants to take its experience and enter the tokenized precious metals markets in a major way. You can expect to see more headlines from these developers as CoinShares’ strategy unfolds over the coming weeks.
VeVue Signs Partnerswith CBX for Token Launch
The blockchain-based social media platform, VeVue announced plans to host an STO in the coming weeks. The company intends to expand the platform’s capabilities with the funds raised. Now content creators have a more lucrative alternative to consider moving forward.
News of the company’s intentions first broke via an October 14 press release. In the post, the company announces its new strategy and partnership. As part of the firm’s new crowdfunding approach, VeVue partnered with the hugely popular CBX exchange.
For its part, CBX will be responsible for the sales, token issuance, and distribution of the VUE token. CBX is one of the largest crypto exchanges based in the Middle East. The firm operates a fully compliant EU exchange. Developers integrated both AML and KYC protocols directly into its trading platform.
CBX recently launched a campaign with Alibaba competitor GoJoyin in which the platform secured over $10 million in funding. The experience gained in this campaign will be critical for VeVue STO’s success.
The VeVue STO will commence on October 28, 2019, at 4 pm PST. Interestingly, the event is scheduled to only last 48 hours. CBX intends to issue 5 million VUE tokens to qualified non-US investors. Vevue also announced that there will only be 100 million VUE tokens in total available to investors. Of these tokens, 35 million are reserved for investor purchases.
Vevue and CBX Unique Strategy
CBX and Vevue have a unique strategy for their crowdfunding efforts. The company intends to host an STO monthly moving forward. Additionally, these auctions will be Dutch-style. Basically, the official token price is set after taking in all bids.
Highest-Price VeVue STO
This strategy enables the firm to receive the highest price for the total offering. For example, investors place their bids which include the price and quantity they desire. The firm will then accept the top 5 million bids for the tokens.
VUE Token Benefits
VUE token holders receive a portion of gross revenue collected via the VeVue social media app. Consequently, investors actively earn from VeVue’s ecosystem. The App provides content creators with a revenue-generating outlet. Here, users can create and monetize content such as videos easily.
VeVue Transaction Fees
Vevue charges a 5% transaction fee on the monetized content. This fee then enters into the dividend pool from which STO investors receive payments daily. Importantly, dividends are paid in VUE tokens. This unique strategy encourages users to create high-quality content to earn more tokens.
Next Level Social Media
Traditional social media doesn’t allow users the opportunity to earn from their content contributions. In fact, the current social media giants provide content creators with zero payment for their efforts.
Social Media Heat
VeVue’s timing is impeccable as social media giants such as Facebook continue to confront lawmakers over a myriad of concerns. Facebook, in particular, appears to be in the target of regulators after announcing plans to issue its own native cryptocurrency called the Libra.
A Better Social Media Alternative
VeVue appears to have unlocked a better way to social media for everyone. Providing users with an opportunity to earn tokens for their content is a smart concept that has proved to be a great alternative in the past. You can expect to hear more from VeVue in the coming weeks as its STOs hit the market.