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AADollar – A New Generation Stablecoin For a Dynamic Market

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The global cryptocurrency market is gradually moving away from the pluralist model of multi asset interaction and is starting to become more centric, revolving around an established and highly capitalized hub of recognized and applicable cryptocurrencies. With the utility token having proven its inability to act as a store of value, the coins and stablecoins are turning into the hub of investment and capital activity on the market. The likes of Bitcoin, Ethereum and USDT Tether are currently holding the position of said hub, with the multiple other altcoins acting as the spokes, revolving around the mainstays, affected by their price movements and developments.

Stablecoins have received considerable traction over the last couple of years in light of the many events that have shaken the foundation of the global economy and undermined the reliability of many global fiat currencies. With fiat devaluing and losing its qualities as a store of value against the background of mounting geopolitical tension and rising inflation, the stablecoin is taking on the mantle of a haven for storing accumulated value and savings in an immutable fashion on the blockchain.

However, the stablecoin market is considerably overheated. The main problem is the presence of a single dominating stablecoin – Tether, which is a systematic risk for the entire industry. Statistics indicate that Tether constitutes 65% of daily trading volumes of all stable tokens, standing at over $155 billion. The world’s largest stablecoin is not very stable, as a Small Taiwanese bank that is fully controlled by Tether Ltd Caribbean Bank is used to store all of its US Dollar reserves. The legal tribulations around Tether go much deeper, as Tether paid an $18 million fine to settle NYAG cryptocurrency cover-up charges. It has also been accused of having no direct connection between the custodian bank and its infrastructure and distributed ledger. With its fully manual issuance of tokens, the system is completely dependent on the reliability of its staff. The latter factor casts serious risks of fraud on Tether, as any misuse on the [art of the administrators would potentially result in the additional issuance or burning of the coins.

The inherent weakness of a legal status of Tether extends to the lack of rigorous KYC/AML procedures leading to a systematic risk for the stablecoin and its custodian, including risk of reserve funds blocking. So far Tether has defaulted on many promises to deliver transparent audits, as publicly available data suggests that the token is 49% backed by unspecified commercial papers.

Such risks compile and undermine both the integrity of Tether as a reliable stablecoin and result in significant risks for those relying on it as a secure store of value for their savings and as a trading instrument.

The solution lies in the creation of a truly reliable and credibly backed stablecoin that would be able to offer its holders an undisputed degree of transparency and integrity as a digital currency retaining value on the basis of the inherent qualities of the blockchain. The AAD project is creating such a solution in the form of digital cash — stable and liquid as fiat money, boundless and immutable as cryptocurrency – the world’s first digital cash built right.

The AAD project intends to maintain all of its reserves in a Swiss bank with Cryptographic Proof of Reserve backing. The merger of real-world finance and decentralization means that the coins may not be issued, or burned without the approving cryptographic signatures of AAD and the repository Bank, thus confirming that the account balance has been changed. All AAD coins will be maintained at a 1 to 1 ratio in US Dollars deposited on the reserve account and coins in circulation.

The underlying Cryptographic Proof of Intent algorithm means that the coins are issued or retired only in case of the corresponding intent registered by a customer on a public blockchain. The 1 to 1 intent-issue amount and intent-burn amount ratio is cryptographically verified, meaning that issuance without reserve and retirement without withdrawal is impossible due to cryptographic restrictions.

Application of mandatory KYC and AML procedures will add a much-needed layer of security and legality to the AAD stablecoin, as all new clients will be obliged to pass it prior to the purchase or sale of any tokens. A progressive legal framework set in Zug, Switzerland, supervised by Swiss authorities will complement the basis of the AAD infrastructure built on the Ethereum blockchain and its scaling to other major DeFi platforms.

As the world’s first digital cash built right, AAD will launch a strategic initiative aimed at achieving listing on the most prominent global exchanges, thus becoming available for the broader crypto community. AAD will move towards becoming an enabling technology for payment systems, remittance payment solutions, e-commerce platforms and other value exchange systems.

Considering that the main users of Tether are exchanges, arbitrage traders and members of the crypto community, AAD intends to develop a solution that will cater to all layers of the decentralized market audience, thus providing them with a reliable and credible stablecoin. The project will ensure that all the fundamental problems of the stablecoin market are addressed, while rapidly gaining traction and broad adoption within both the crypto and fiat domains. By combining excellent technical expertise, partnership with a Swiss bank and full transparency on the basis of impeccable Swiss regulation, AAD intends to become the go-to stablecoin solution on the market.

The tokenomic model of the AAD project is based on the mechanism of generating revenue from commissions for each transaction carried out with the use of the AAD token. The commission is paid in AAD tokens at a fixed rate of 0.2% per transaction. The AAD project’s business development team will be fully focused on promoting the token as a means of payments in the e-commerce retail sector, while attracting active market traders who are currently largely exposed to Tether. With the annual turnover of stablecoins in 2021 on-chain standing at $2.5 trillion, AAD foresees that the introduction of its solution and its integration into such off-ramp systems of Visa and Mastercard as a means of payment will result in an immediately addressable market of around $20 trillion.

The AAD project development team also foresees considerable demand from groups that perform arbitrage trades between exchanges. The basis of AAD as a secure, transparent and liquid means of payment shall attract more retail users and new entrants into the decentralized assets market seeking reliable value storage instruments.

The ultimate goal of AAD is to become a means of exchange for payment systems, empowering developers from across the globe to build their payment solutions with AAD at its core.

There is immense verifiable demand for stablecoins, however, related projects currently operating on the market have provable design flaws, which have led to explicit technical and credibility issues, including investigations, legal actions, over issuance of coins, and others. A true stablecoin has to consist of a combination of unique blockchain characteristics, such as immutability, a lack of intermediaries, instant settlements, and fiat stability, while maintaining the functionality of a store value and a means of payment.

The AAD project has combined all the necessary elements to build a true stablecoin relying on a recognized legal framework, a competent team with extensive professional experience, a Swiss banking partner, and legal supervision. The given factors, and the existing market makeup give the AAD project the necessary bedrock to develop and scale in an aggressive fashion that will attract investor involvement and bootstrap user engagement.

LINK:

Site: https://aadollar.ch/

Twitter: https://twitter.com/aad_token
Telegram channel: https://t.me/aad_official
Telegram community: https://t.me/aadtoken_channel

 

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Why Gold Is Beating Bitcoin In 2022

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Bitcoin continues to underperform as a general “risk-off” sentiment has investors driving toward gold as a safe haven asset.

Not Risking It

Concerns about the Russo-Ukrainian war continue. The U.S. inflation struggles at a four-decade high and Fed rate hike fears prevail. The uncertainty extends to the world economy as a recession is expected instead of a recovery. The IMF’s managing director Kristalina Georgieva called it “a crisis on top of a crisis.”

“The war is a supply shock that reduces economic output and raises prices. Indeed, we forecast inflation will accelerate to 5.5 percent in advanced economies and to 9.3 percent in emerging European economies excluding Russia, Turkey, and Ukraine. ” The IMF stated last week.

Reuters recently quoted Commerzbank analyst Daniel Briesemann, who talked in a note about the factors that have “lent buoyancy to gold in recent days,” mentioning the “strong buying interest on the part of ETF (Exchange Traded Fund) investors” and news about the Ukraine war.

“Russia appears to be preparing to launch a major offensive in the east of the country – that is generating considerable demand for gold as a safe haven,” the analyst said.

This summarizes the “risk-off” sentiment at the moment. As expected, equities suffer as investors are selling risky assets and purchasing the ones negatively correlated to the traditional market. Thus, the crypto space is struggling alongside de stocks market and gold is rising.

Bitcoin Outperformed By Gold

Data from Arcane Research’s latest weekly report notes that it has been a gloomy year for the “digital gold.” In the first three weeks of 2022, Bitcoin sank 25% and it is still down by 18% in the year despite its slight recovery.

Similarly, Nasdaq records a 19% decline in the year, having underperformed against bitcoin “by a small margin,” notes the report, adding that “This is surprising given that bitcoin has tended to follow Nasdaq, albeit with higher volatility.”

The general fear over geopolitical and macroeconomic uncertainty has given gold the safe-haven asset spotlight once more. The asset outperformed all the other indexes seen below with a 4% gain.

Physical gold outperforming “digital gold” in 2022 | Source: Arcane Research

Meanwhile, the currency market is performing with “the same risk-off patterns.” The Dollar has been proving its “risk-off” dominance as the US Dollar Index (DXY) is up 7%. The Chinese yuan has taken a hit over concerns about the country’s “zero-covid” policy –which creates issues for the global supply chain– and the slowing down Chinese economy. In contrast, investors have been running to the US Dollar for safety.

Bitcoin supporters usually refer to the coin as “digital gold” alleging it is a safe haven asset, and this narrative had held well while BTC had been “uncorrelated with most other major asset classes,” but the tide is shifting with the 2022 scenario as investors are rather placing the coin “into the risk-on basket”.

A previous Arcane Research report indicated that bitcoin’s 30 -day correlation with the Nasdaq is revisiting July 2020 highs while its correlation with gold has reached all-time lows.

A pseudonym traded noted that “As Bitcoin adoption goes on and more institutional investors enter the market, the correlation of BTC and stocks becomes more and more tight. That is a paradigm that the crypto world struggled to come to terms with in the past but is now more real than ever. A healthy stock market is good for Bitcoin.”

Meanwhile, the general sentiment of traders seems to be bearish, with many saying that the coin could visit the $30k level soon.

Bitcoin
Bitcoin trading at $39k in the daily chart | BTCUSD on TradingView.com

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Attendees talk the future of NFTs

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The crypto community headed to Nassau in the Bahamas this week for the inaugural Crypto Bahamas conference.

Like most conferences, panels fill up the agenda and on Wednesday the topics at Crypto Bahamas ranged from NFTs to crypto in sports and to asset allocation in Web3. During one particular conversation, titled Evolution of NFTs: Culture, Utility and Regulation, panelists had some insightful musings on the NFT market.

To put the Crypto Bahamas conference into context, Sam Bankman-Fried’s cryptocurrency exchange FTX moved its headquarters from Hong Kong to the Bahamas in Sept. 2021. It recently inked a multi-year partnership with Anthony Scaramucci’s investment firm SkyBridge Capital, and its events arm SkyBridge Alternatives, or SALT. They jointly presented the conference.

That’s why the NFT panel consisted of multiple perspectives from Tristan Yver, head of strategy at FTX U.S., Joseph Doll, attorney at Fenwick law firm, Roham Gharegozlou, the chief executive officer at Dapper Labs, and Sarah Hammer, the managing director of The Stevens Center for Innovation in Finance at The Wharton School. Zack Guzman, writer for the Meta-owned newsletter platform Bulletin, moderated.

Gharegozlou pointed out how new the NFT market truly is when “most people have only been thinking about it for a year and a half,” making valuations “very immature.” As the CEO of Dapper Labs, the company behind NBA Top Shot,  Gharegozlou recognized that “utility, rewards and the how you value and NFT is primarily based on the strength of that of the community.”

He added that a good way for an NFT collection to build a strong community is to have multiple tiers of scarcity. In the case of NBA Top Shot, at the higher price end there is extreme scarcity, but there are also millions of “common” moments so that people can “get their first NFT and see how it feels without breaking the bank.” 

Tristan Yver echoed that the current valuation and pricing model for NFTs is based on a collective perception on value based on the amount of people willing to buy an asset for a certain amount. He anticipated a “movement away from this consensus view to a more unique singular view where people buy things that resonate with them rather than what resonates with a larger community.”

Joseph Doll chimed in to say that “communities need to be thoughtful about democratizing access.” There are some “massive” barriers to entry to certain projects, he said, including not being early enough or not having enough capital at the time. He questioned, “That’s not what crypto is about, right? It’s kind of about the exact opposite of that.” Democratization, he suggested, can come in the form of derivative projects at better price points.

Another important point brought up by Yver was the reality of scams, especially on Discord and Twitter. He said that “we need to move past security aspects to be able to really bring in the next large mass of users.” He recommended talking among family and friends or asking a Discord moderator to make sure “you click the right link when minting that NFT” because “wallet security sucks right now.”

Gharegozlou even said that Elon Musk, the new owner of Twitter, should use Web3 to fix Twitter’s fraud problem, just as Discord should use Web3 authentication and verification as well. “Once NFT’s are the sort of identity bridge across all these different social networks, identity and assets, authenticity, provenance,” then the system can be more resilient he added.

When asked what “main alpha” the audience should bear in mind, Doll said to engage with and be part of these NFT communities even if it’s “scary,” because getting scammed is a “part of the journey.”

Sarah Hammer, who leads the Cypher Accelerator at Wharton business school, said that the school is launching an incubator specifically for NFT projects in partnership with Dapper Labs because the “NFT model is a business model for the future.” She emphasized that the greatest way to grow and innovate in the space is to increase education efforts in order to get more people learning and working together.

Related: Goldman Sachs reportedly eyes FTX alliance with regulatory and public listing assistance

Recently the Bahamian government allowed residents to use digital assets, including the world’s first central bank digital currency, or CBDC, to pay for taxes in 2022.