The launch of cryptocurrencies over a decade ago opened up opportunities for the creation of a host of other projects. Prior to this launch, society had to rely on traditional financial institutions to process payments and make transfers. However, these institutions are laden with errors and are usually not as fast, cheap, nor as efficient as we would have envisaged.
To eliminate all of these problems and offer users an opportunity to make and receive payments faster and at a cheaper cost, many protocols have been launched, all thanks to the advent of decentralized finance [DeFi], the billion-dollar crypto trend. One such project is The Standard.io.
The Standard.io Protocol
Founded by Joshua Scigala and Laurin Bylica, The Standard.io is an Ethereum-based protocol designed to enable users to generate loosely fiat pegged stablecoins backed by digital and physical assets. Launched less than a week ago, The Standard attempts to solve a few of the problems plaguing DeFi adoption today.
To meet the needs of their various economies, the US and UK Central Banks, according to several reports, printed more money in 2020 than they have ever done. Besides that, developing countries affected by the novel COVID-19 pandemic resorted to continually printing cash as well. While most of these governments have good intentions, policies like these tend to affect citizens negatively in the long run.
With all of these happenings, experts predict inflation or excessive rise in price, hyperinflation. To combat this looming economic occurrence, the Australian School of Economics, in a recent report, has proposed the idea of a Gold Standard. Since no government can create value, the school of thought is proposing an idea of having the value of fiat currencies pegged to a fixed amount of Gold. Albeit a good plan, a few experts still believe that the 400-year old chemical element is overhyped as an ideal inflation hedge instrument.
Besides Gold, Bitcoin could save investors by offering them a perfect hedge against inflation. Its trustless, immutable, and transparent technology made possible by blockchain technology ensures that users can make and receive payments globally and indiscriminately. The problem, however, is that the premier cryptocurrency is problem-ridden. It is presently unscalable, inefficient, and a tad expensive at times.
The Standard. as a protocol, has been designed to solve this major sticking point. According to the white paper, this project proposes a decentralized new-age Gold Standard that is not reliant on a central authority. The Standard enables token holders to generate an array of fiat pegged stablecoins by borrowing against their asset holding. For now, the Standard EURO is the only supported stablecoin. The Standard will, in a future iteration, enable support for the British pound, Indian Rupee, and US Dollar.
According to the developers, this project has the potential to unlock liquidity valued at trillions of Euro worth of cryptocurrencies and precious metals. Moreover, the protocol ensures that users do not necessarily have to sell their assets to spend them.
Another core advantage of the Standard Protocol is that borrowers lend against their existing asset holdings. Since inflation increases the value of goods while decreasing the value of borrowed assets, borrowers can pay back faster. Ideally, Standard.io leverages inflation by putting it to work for users, not against them.
According to a press release, The Standard will debut the Standard Euro stablecoin. Created specifically to enable all forms of peer-to-peer [P2P] transactions, this feature will do away with extreme volatility and any interference from intermediaries or third-party systems. An important step toward ushering a fully decentralized financial ecosystem.
Speaking to reporters about this project, co-founder of The Standard project, Joshua Scigala, stated that it is unnecessary and futile to wait for governments to create a Gold Standard as proposed by the Austrian School of Economics. Instead, the time is now to create the Gold Standard 2,0, capable of empowering users rather than the elite.