Redeemable - A new concept of cryptocurrency

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.

Redeemable concept

The concept behind Redeemable is simple. It brings crypto features without exposure to volatility and at the same time protects from fiat inflation.

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.

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:

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:

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:

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.

Links

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.

Network release

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-operators Discord channel.

We hope to see you there!