A stable price is something all assets seek. The crypto market has almost always been volatile and many projects want to offer stability.
Eidoo wants to attain a stable price for its tokens by tying them to the price of gold. This unique approach will see the ERC-20 compatible token Ekon, sit together with its multiple currency wallet and decentralized exchange. The most important part is that every token will be redeemable for 1g. of 99.9% fine gold. The startup says the gold will be stored in vaults and periodically audited every 90 days.
The last century has shown us that banks aren’t that reliable, especially when it comes to keeping gold. A few years before the gold standard fell in 1971 it became apparent that banks didn’t have the gold to back up the amounts of money they were using. Almost 50 years later, we are feeling the effect as currencies are being printed out of thin air and central banks have the governments and the world in their hands.
In order to reinforce the people’s trust, Eidoo says that users will have access to 24/7 video surveillance. The cameras will monitor the gold stored in the security vaults and any user can use the live link at any time.
A stable price will increase investments, especially in a time of crisis
Eidoo’s token sale raised nearly $28 million last year. The app became one of the most popular platforms for ICO launching. Exchange services were added to appease the growing number of crypto centered users. The exchange services are an area in which the gold-backed token can flourish.
Many people would argue that a token backed by gold isn’t a frequent choice for a stablecoin. The main reason is that the precious metal prices aren’t that stable themselves. It’s not uncommon for large upward and downward spikes in price, but comparing that to the volatile crypto market it’s still an improvement in stability.
Precious metals have however, proved multiple times that they are currently the best store of value. With the many ongoing trade wars, scandals and shaky political climate, many investors are fearing a new economic crisis. Such an event can prove devastating to most developing economies and cryptocurrencies and precious metals should become the go-to for most investors. A combination of both can prove to be the safest choice. A stable price in a time of crisis is literally worth it’s price in gold.
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