Inflation is a key player in driving people to explore different kinds of savings. The way traditional money works, a decrease in purchasing power is nearly unavoidable. Even the US Dollar, considered the most stable and powerful of all currencies, is subject to inflation, currently reaching a staggering 5%.
In the midst of all this, putting cash in bank accounts is not a wise option. Especially when governments have the power to print as many notes as they wish and erode the buying power of a currency. Therefore, people turn towards precious metals, high-value gems, and cryptocurrencies. Though eventually, the need for money means users will need to sell their savings sooner or later. Putting up the hard assets against a loan is a better choice, but that is not simple. Banks can be rather picky on the assets they accept, offer non-competitive rates, and charge high interest.
Better than Bank Loans
The Standard is a DeFi platform that gives people a whole new avenue through which they can obtain loans against their assets, without the headache of going through a bank. The Standard uses smart contracts to build a whole new ecosystem that is frictionless, cheap and faster than any bank loan:
- Multi Collateral Support: Whether bullion or cryptocurrencies, The Standard accepts a wide variety of digital and physical assets, using the current market rate rather than self-evaluation.
- Low Interest: Since the loans are issued through a smart contract, there is no intermediary that would take commissions and charge high interest rates to cover for it.
- Instant Release: As soon as the collateral is deposited, the smart contract releases the borrowed amount through the S-EURO stablecoin.
- Immediate Return: As soon as the borrowed amount, along with the interest, is returned, the collateral is released. There is no waiting time nor paperwork involved.
S-EURO, Algorithmic Stablecoin
The Standard has created its own stablecoin that is soft pegged to the EURO. The S-EURO is the first algorithmic EURO stablecoin in the world that has its value kept constant through complex mathematical formulas.
Based on Ethereum’s ERC20 standard, borrowers of S-EURO can spend the tokens anywhere it is accepted, even selling them in the market for traditional currency. The borrowed amount and the interest can be paid back by buying floating S-EURO on the secondary markets, or by returning the initially borrowed S-EURO amount.
Using a stablecoin means that borrowers are free from price fluctuations, something cryptocurrencies are renowned for. A 1,000 S-EURO loan will be 1,000 S-EURO when returning (plus interest, of course).
Stablecoins note strong interest by governments and the S-EURO, as the first algorithmic EURO pegged token, will showcase the value of The Standard’s approach to merging traditional currencies with crypto assets.
As a true DeFi platform, The Standard is free from central control and lets the public be part of the overarching Decentralized Autonomous Organization (DAO). The Standard Token is the native crypto token that people will be able to acquire. There are several advantages offered by the Standard Token:
- Governance: Standard Token holders will have voting rights, letting them decide on the future of the platform. That includes weighing in on the interest rate, acceptable collaterals and any other updates to the platform.
- Discounts: A 50% discount on the stability fee applies to Standard Token holders. The stability fee is used to keep the S-EURO price pegged.
- Collateral Liquidation Buying: Collaterals of loan defaulters can be bought below spot prices by Standard Token holders.
Furthermore, The Standard Token is a deflationary token, as only 1 billion will ever be minted. As the popularity of The Standard and its lending services increases, the demand for the Standard Token can become more outspoken. Unlike the S-EURO, Standard Token has no peg to a fixed value, and remains subject to price changes.