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Coinbase Ventures has allocated $1 million to support the development of a new digital asset known as SPOT. This cryptocurrency is classified as a flatcoin, serving as an alternative to stablecoins and enabling users to preserve value independent of fiat currencies.
The venture capital division of the cryptocurrency exchange Coinbase has invested $1 million in the creation of a new decentralized digital asset named SPOT, which is being developed by the Ampleforth Foundation team at Fragments. This information was reported by The Block.
The asset is set to be launched on the Base L2 protocol network established by Coinbase as part of the agreement. Users will be able to access the asset through the decentralized exchange Aerodrome Finance.
Evan Kuo, CEO of Fragments, stated that SPOT is the culmination of five years of research and development. He also pointed out that stablecoins linked to fiat currencies frequently experience volatility due to inflation affecting the underlying assets. In contrast, SPOT is categorized as a flatcoin, meaning its value is associated with the Consumer Price Index (CPI) instead of fiat currency.
A flatcoin is defined as a digital asset intended to maintain a consistent value. Flatcoins monitor consumer prices or a collection of goods, enabling holders to preserve purchasing power irrespective of inflation. The term was introduced by Balaji Srinivasan, former CTO of Coinbase, in 2021.
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SPOT merges features of fiat currencies, like the U.S. dollar, with hard commodities, such as gold, resulting in a fully decentralized and low-volatility asset suitable for use in the on-chain economy.
The white paper explains that SPOT’s stabilization is achieved through the volatility segmentation mechanism of AMPL, the native token of the Ampleforth protocol, utilizing a process known as tranching. This process effectively divides the token into two tranches: a senior tranche with low volatility, which is SPOT, and a junior tranche, stAMPL, which absorbs the majority of the network’s volatility. Users can deposit AMPL to generate SPOT and stAMPL and can exchange back to AMPL at any time.
Tranches have a fixed duration of one week. Following this period, they are automatically converted back to AMPL. To ensure continuity, the protocol continuously recycles tranches nearing maturity, substituting them with new tranches. The volatility of AMPL is segmented so that most fluctuations occur in stAMPL, safeguarding SPOT quotes from substantial changes and enabling the asset to maintain stability.
Flatcoin technology received commendation from Brian Armstrong, CEO of Coinbase, in 2023. In a discussion with Yahoo Finance, Armstrong referred to these assets as “the next iteration of stablecoins,” highlighting their benefits over all current cryptocurrencies.
Tether has recently launched a new digital asset called Alloy (aUSDT), a synthetic stablecoin that is backed by the Tether Gold token (XAUt) and pegged to the value of the U.S. dollar.
Сообщение Coinbase Invests in Flatcoin Ecosystem Growth появились сначала на CoinsPaid Media.
