Bitcoin was created in 2009 as a better currency for commerce and remittances over the internet, as well as a means for separating money from the state. History was made in 2010 with the first Bitcoin payment of 10,000 BTC for two large pizzas — the equivalent of around US$40 at the time — proving that Bitcoin could be used as a feasible medium of exchange. But while it can be used for payments, Bitcoin’s volatile market price makes it a poor store of value or unit of account, meaning it fails two of the three main criteria needed for a functional currency.
Stablecoins were introduced to fill this void by providing a stable, non-fluctuating price point, making them ideal for all the same uses as fiat currencies. Stablecoins were also found to be convenient for trading with other cryptocurrencies on crypto exchanges, which gave rise to the decentralized finance (DeFi) movement in 2018. That same year, the USD-backed Tether ($USDT) stablecoin shot up from 10% to 80% of Bitcoin’s trading volume. By the “DeFi Summer” of 2020, Tether’s total supply surpassed 200 billion, solidifying USDT as the current reserve currency in cryptoland.
But when inflation rates started surging in late 2020 / early 2021, USD-backed stablecoins like Tether began depreciating right along with the US dollar. Since 2020, the United States’ inflation rates have risen by over 8%, while the average worldwide inflation rates have risen by over 4%. We are now in an economic period of high inflation that makes every stablecoin pegged to fiat — including the three dominant stablecoins, USDT, USDC and BUSD — a poor store of value.
These economic stressors have proven that the world needs a new evolution of the stablecoin that fulfills all three attributes of money. It must be an effective store of value that protects against inflation, while retaining all of the advantages that made stablecoins the backbone of DeFi and CeFi.
Enter: Nuon, the first flatcoin.
What is a Flatcoin?
noun: flatcoin; plural noun: flatcoins
a cryptocurrency designed to have its price remain flat to inflation, typically through being pegged to the value of a basket of goods rather than a fiat currency and adjusted for inflation on a regular basis
"Nuon is the first flatcoin with a peg adjusted daily for the true inflation rate through an independent inflation index."
This is our definition — the term flatcoin is so new that it isn’t even in the dictionary yet. Nuon is breaking new ground.
While stablecoins seem to fulfill all three attributes of money, current high inflation rates have proven that fiat-backed stablecoins are not a proper store of value. Currently, 92% of all stablecoins are centralized and backed by fiat currency, and 99% of all fiat stablecoins are backed by the US dollar. Stablecoins pegged to USD are in danger of rapid depreciation due to runaway inflation. And due to their centralized nature, fiat-backed stablecoins also bear counterparty risks and are subject to aggressive crypto regulation and censorship.
The Nuon flatcoin is different. It’s not pegged to fiat, but rather to an independent inflation index. It’s also completely decentralized and backed by cryptocurrency collateral. Together, this ensures that Nuon bears no counterparty risks and remains unaffected by USD inflation or centralized monetary policy.
Nuon is the Perfect Combination
The most desirable and trustworthy way to ensure the value of a stablecoin is to over-collateralize it with cryptocurrency on a decentralized protocol. Crypto-backed stablecoins are able to avoid the inflation effects of fiat. Over-collateralization ensures that their value remains intact. Decentralization keeps everything completely transparent. It’s the perfect recipe for the next generation of stablecoin that solves the most pressing real-world problem today: inflation. Nuon is the only true store of value in the crypto market today.
Nuon is challenging the norm by offering a better currency that is made for the people and decentrally governed by the people — an inflation-protected flatcoin that automatically generates yield with tradable liquid positions and adjustable collateral. It’s better than all stablecoins on every account, and far better than fiat. Simply put: Nuon is better money.