One of the problems often cited when talking about cryptocurrencies is their level of volatility compared to traditional fiat currencies. This makes most cryptocurrencies a poor instrument for storing value, and introduces complexities when making purchases in fiat amounts. Stable cryptocurrencies include mechanisms which allow them to stay pegged to fiat currencies like the US Dollar or Euro. They present a number of advantages, and, in addition to taking the headache out of making purchases, can be used by cryptocurrency traders who need a stable unit of account for hedging their assets.
We talk to brothers Pascal and Julien Hamonic, Core Members of the Nu team about the NuBit stable cryptocurrency. Similarly to the mechanisms that keep our body temperature stable, NuBits relies upon the introduction of new coins into circulation when demand increases, and for coins to be taken out of circulation when demand drops. Shareholders (NuShareholder) vote on these measures as the network relies on custodians who bring liquidity into the market in exchange for dividends, and on speculators who “”park”” coins in exchange for potential returns when demand increases again.
Topics covered in this episode:
What is NuBits and what is the goal it is trying to achieve
The different components of Nu (NuBits, NuShares)
The economic mechanisms behind the $1.00 USD peg
Who are the different participants in the network (NuBits users, NuShareholders, custodians)
The important role of custodians in providing liquidity to the network
The consensus model used in Nu
The initial allocation of NuBits and NuShares
The governance mechanisms in Nu
Episode links:
Nubits
NuBits Whitepaper
This episode is hosted by Meher Roy and Sébastien Couture. Show notes and listening options: epicenter.tv/133