Stablecoins have evolved to insulate crypto investors from token price volatility, or at least the perception of it. MahaDAO is one of the first platforms to see that fiat-linked stablecoins aren’t really that great for ensuring buying power, at least on a time frame of more than a few months.
The ARTH token ecosystem is the solution to this problem, and it is a well thought out platform that could change the way investors see value.
When people think about the price of the major crypto tokens, like Bitcoin or Ethereum, the idea of a volatile asset class might pop into their minds. While this is partially true, the direction of crypto prices has been up ever since they were introduced to the public.
Long term crypto investors probably love this, but anyone who has to pay for daily needs with cryptos isn’t in the same position.
The answer to this discrepancy between short-term volatility and long-term appreciation has been fiat-linked stablecoins, but this isn’t a perfect solution. There is zero doubt that the value of fiat currency drops over the long term, and the price of useful goods rises in fiat currency terms.
When then-US President Nixon ended the gold standard in 1971, an ounce of gold sold for $35 – now an ounce of gold costs more than $1800. Clearly, using fiat currency to balance the volatility in the crypto markets is a very poor idea in the long run.
People feel comfortable using fiat currency because large, fast losses of buying power are rare (at least in some cases), and the price of day-to-day necessities are relatively stable. On the other hand, over time, the use of fiat currency or a fiat-linked stablecoin is a poor idea, as the losses from this asset are guaranteed.
MahaDAO has Novel Solution to the Stablecoin Dilemma
MahaDAO has created the infrastructure to support the ARTH token, which is a valuecoin that is backed by a basket of non-correlated assets. While a fiat-linked stablecoin is subject to the price changes of the underlying fiat…