Shareslake aims to become the base network for the stock markets of the future and companies' funding.
Redeemable (RED) is the base coin of the Shareslake network, which was the first ever Cardano fork. Redeemable is designed to get rid of crypto volatility and at the same time protect from fiat inflation. Continue reading to learn more.
The concept behind Redeemable is simple. It brings crypto features without exposure to volatility and at the same time protects from fiat inflation.
It IS NOT a stablecoin because it is not pegged 1:1 with a fiat currency.
It IS NOT a common cryptocurrency because its value changes so slowly that can be considered stable. Also, its value is deterministic (can be calculated).
These features are not only desired by businesses, but also by almost everyone who wants to save money.
How Redeemable works
Imagine we want to buy a pizza. Today it costs 10 USD but due to inflation, it will cost $14 in 4 years. Now let's imagine we buy the same pizza today for 10 RED. In 4 years, it will continue costing you 10 RED.
This effect, as well as the deterministic state, is reached by backing up Redeemable with a reserve of fiat and traditional assets. The reserve is invested into Treasury Inflation-Protected Securities (TIPS) and bonds and the interest earned is re-invested on the same reserve. This causes the effect to increase the reserve value following CPI rates. At any moment, the Redeemable value can be calculated as the value of the assets in the reserve. Let's illustrate this:
Let's start with a reserve of $100 and 100 RED in circulation.
RED supply: 100
Price per RED: $1
Now, let's suppose there is an inflation of 4% during the next 5 years. Since Redeemable will gain value at the same rate as CPI:
RED supply: 100
Price per RED: $1.17
We got an increment in the Redeemable value against USD that compensates for the loss of purchasing power. 4 years ago you could buy 10 pizzas using Redeemable and today you can buy the same 10 pizzas. If you use dollars or stablecoins, today you can buy only ~8.5 pizzas instead of 10.
Companies operating with RED can benefit from:
Knowing at any moment the value of its treasury in USD for taxes purpose and be sure it won't drastically change from one day to the next.
Maintaining liquidity in their treasuries without worrying because it will always be worth the same.
Setting prices in Redeemable and forgetting to update them every year to adapt to inflation.
People using or holding RED will maintain their purchasing power over time without the need to invest or lock their money into traditional investment products.
Why Redeemable is required?
A company or business operating in a certain country pays taxes on it. The currency adopted by the country for paying taxes will generally be the trading currency for the company shares. We can easily calculate the value of a company using the same currency it uses to report earnings or a currency whose exchange rate is relatively stable. This is a big problem when we talk about tokenizing company shares or bringing the stock markets to the crypto world.
Usability requires stability. In other words, no volatility. If it is already complicated to establish a business when you don't have to worry about currency fluctuations, imagine if your business can lose 10% of the accumulated income from one day to the next just because of the currency volatility. Remember a company reports earnings using the country's currency, so, if a company operates using crypto, at some point the currency exchange needs to happen. There are two common solutions for these problems:
Instant exchange: instant exchange consists of setting prices in fiat currencies and allowing people to acquire products with crypto by exchanging the currencies at the purchase time. It isolates the business from the crypto volatility but has implications on the clients, such as waiting for the purchase to see if they can obtain the product an x% cheaper tomorrow.
Stablecoins: stablecoins are basically a crypto representation of a fiat currency, bringing crypto advantages without exposure to volatility or the need to exchange currencies. But they are pegged on a 1:1 basis with fiat currencies, losing value due to inflation. This is why we think stablecoins are not stable.
Stablecoins have the same problems as fiat currencies. They do not preserve the business's wealth. A company, or any person, wants to preserve the value of the already earned income. A company (operating in fiat) that maintains a positive balance on its accounts is directly exposed to inflation losses. Also, it needs to update its product prices according to the inflation rates to remain profitable. Inflation rates, in terms of increases in living costs, are generally measured by the Consumer Price Index (CPI).
Redeemable is a new concept of cryptocurrency, that can be considered a hybrid between stablecoins and common cryptocurrencies, benefiting from increasing its value to forget about fiat inflation but being stable enough to be usable.
One of Shareslake's objectives is to make the Redeemable coin multi-chain. This is, being able to move and exchange Redeemable not only in Shareslake's network but also in other widely adopted networks.
How can Redeemable benefit other networks?
Blockchain users usually exchange coins and tokens with stablecoins for protection during volatility periods. Nevertheless, stablecoins, even if they are pegged to a fiat currency, are still subject to fiat currency inflation.
Redeemable offers a new type of cryptocurrency which allows blockchain users to protect not only from crypto volatility but also from fiat inflation at the same time. This is possible thanks to the unique setup of a reserve that backs up Redeemable value. Such reserve translates holding Redeemable into preserving the purchasing power over time. Read more about Redeemable coin here.
Moving Redeemable between networks opens the possibility of swapping other networks' tokens or coins by Redeemable directly from other networks' decentralized exchanges and token swap platforms. It also makes the listing of Redeemable easier in exchanges when they already support tokens from other networks. And finally and most important, it allows users of any blockchain to preserve their purchasing power when they like to maintain liquidity in their wallets.
How does the bridge work?
Shareslake's bridge works as easily as connecting your wallet to the bridge website. Then, you can select the network and address to which you intend to transfer Redeemable, and, after signing and submitting the transaction, your funds will be moved to the target network and address.
There is a token representing Redeemable on each network supported by the bridge. When the bridge performs the movement of funds between networks it issues and burns the amount to transfer or locks and unlocks the same amount into Shareslake's network.
Shareslake's bridge has been designed in a way that Shareslake's network users are always protected from minting/burning issues. A user who does not move Redeemable outside of Shareslake's network will never be affected by an error in the bridge. This is achieved by letting come back to Shareslake's network only the amount of Redeemable that went out before. Each network added to the bridge implements this same mechanism separately, so users moving Redeemable on network A will also never be affected by an issue on network B.
Current state and future of the bridge
Currently, the bridge is in an advanced development state. Initially, it will support moving Redeemable between Cardano and Shareslake. Then, we will continue working on adding new networks such as Ethereum, Solana, etc.
The bridge initially will support the movement of Redeemable only, but it will be evolving to support multi-asset transactions between networks. In the long term, the bridge will support remote execution of smart contracts, which means calling contracts of any network from Shareslake and vice versa.
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Shareslake Mainnet - The beginning of the stock market change
At Shareslake we use blockchain technology to shape the future of the stock markets. We provide benefits to the companies for each transaction of their shares without charging the investors.
Investors won't be ever again bound to a single broker or platform, eliminating portfolio transmission complexity. They can just have a single pluggable wallet, that can be used for the login at any exchange, always carry your funds with you.
On May 1, 2022 the Shareslake Mainnet was released, meaning that everyone can add a node to the network, earning RED from transaction validations, or use it for sending funds. The network is the base for the rest of the ecosystem that will allow trading stocks, buying products, automating companies' financial processes, etc.
Shareslake is a Cardano-based network, meaning that we use the eUTxO model and Ouroboros for consensus, indeed, we use the same open-source components of Cardano. Shareslake addresses are fully compatible with Cardano addresses, so you can manage funds in both networks with a single wallet, just changing the network connection settings.
The initial supply of 10 million Redeemable was already issued to 4 different addresses, corresponding to each ICO batch plus the team allocation. Apart from that, 900000 RED per year will be released and used to reward the companies adding value to our network.
Shareslake epochs long 3 days, unlike Cardano which uses epochs of 5 days. We decided to use 3 days epochs to allow a faster re-balancing of network stake, allowing faster pool hopping as well as receiving stake rewards more frequently. This change constituted a discrepancy compared with our initial whitepaper, which stated we will use 5 days epochs.
Joining the network
To encourage the adoption of new Stake Pool Operators (SPOs), and help them with the deployment, we created a GitHub repository with instructions and scripts: Stake pool deployment guide. It is really similar to how it was done in Cardano. Also, every question or doubt can be posted into our #stake-pool-operatorsDiscord channel.