Inflation, stablecoins and Redeemable

The blockchain and DeFi universe continue growing engaging more and more people every day. Nevertheless, what attracts most people is also what keeps others away. We are going to talk about volatility, inflation, stablecoins, and Redeemable, the new coin from Shareslake.

Inflation, stablecoins and Redeemable

There has been a lot of noise regarding the continuous shifts in cryptocurrency and token values, and the majority of people, whether involved or not with this new technology, are aware of it. Nevertheless, there is still a reluctant majority that prefers to stay away from daily changes of 10% of their savings.

Stablecoins, among other things, are meant to solve this issue. Their peg to a traditional currency eliminates the wild fluctuations, allowing cautious people to jump into the crypto world. Nonetheless, stablecoins have the same undesirable trait as regular money: inflation.

Even if the price of a stablecoin is fixed, people will still be unable to preserve their wealth, because the stablecoin will lose value over time as a result of inflation, just as a regular currency would. Thus, stablecoins cannot be considered stable in terms of ‘real value.’

People are forced to lock their savings into investment products if they want to preserve their wealth, and it prevents the owner from using the funds. In order to preserve wealth while still being able to spend the money, Shareslake created the Redeemable coin. It’s the same thing as being inflation-protected without locking up funds.

Redeemable is backed up by a reserve. Users can fund the reserve to obtain RED or burn RED to get back their USD. The reserve relies on the most secure traditional assets (bonds and TIPS) to generate and accumulate interest. Unlike stablecoins, where the issuer takes such interest as profit, the Redeemable reserve accumulates it, increasing the total reserve value. Since the Redeemable supply remains unchanged during this process, each Redeemable’s backing increases, thus its value.

Redeemable is designed to adjust its value with the CPI (Consumer Price Index). The CPI measures the change in living costs. Using Redeemable one can expect to pay always the same amount of RED for a product or service, no matter how its USD price evolves due to changes in living costs.

Consider a $1000 bicycle. You may buy such a bicycle today for $1000 or 1000 REDs. By 2027, if there is a yearly inflation rate of 4%, the same bicycle will cost $1220. However, it will still cost 1000 RED, as the RED value would have changed in line with living costs.

Redeemable stands out for being ideal to maintain treasuries and cash reserves in an efficient way and aims to attract conservative people and institutions to the crypto world.

Shareslake was built as a Cardano-based network. It was the first Cardano fork ever, released on May 1st, 2022. That means Redeemable offers all the Cardano features but with a base coin that enjoys price stability and inflation protection.

Redeemable will also exist in other blockchain networks. Shareslake is building bridges to interconnect the network with other ecosystems and provide them with Redeemable advantages, starting with Cardano.

Shareslake and Redeemable were built to serve as the base for upgrading the traditional stock markets, making them more open, transparent, and accessible, and it follows a special mindset of helping small and medium size companies to grow by providing extra funding.

A new kind of stock market with unlimited potential is being forged by Shareslake.

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