Coinbase plans to develop inflation-pegged stablecoin-‘flatcoins’
Crypto exchange, Coinbase sees inflation-pegged flatcoins as one of four critical innovations that should be built on its recently launched layer-2 network Base.
By Anna B Kiwanuka
Platforms are still being developed despite all the regulatory scrutiny that the crypto-verse is being subjected to. Prioritizing innovation, Coinbase, a prominent cryptocurrency exchange is exploring flatcoins on its Base network.
Recently, Coinbase revealed that flatcoins which are inflation-pegged stablecoins, would be essential to be formulated on the Base network. According to the exchange platform, this is among three other critical innovations that are expected to be built on the exchange’s layer-2 network.
The exchange’s latest interest is being viewed as bizarre as most stablecoins are pegged to the U.S. dollar (USD) or a fiat currency. Coinbase’s flatcoins are looking to be backed by the price of living. This will be done by tracking the consumer price index, as well as inflation data.
The launch of the Base network garnered interest. Now, the layer-2 network’s first step is the creation of an inflation-pegged flatcoin.
In light of the current financial crisis, Coinbase stated that it is now more important than ever to create an inflation-tracking stablecoin that contradicts central banks’ flawed monetary policy decisions.
Elaborating on this, Coinbase wrote, “We are particularly interested in ‘flatcoins’ — stablecoins that track the rate of inflation, enabling users to have stability in purchasing power while also having resiliency from the economic uncertainty caused by the legacy financial system.”
Furthermore, since flatcoins would be tied to inflation rates, they are expected to retain their value over time. This option is particularly beneficial in nations or states with high inflation rates, as consumers may be hesitant to keep their savings in local currency owing to its volatility.
Apart from flatcoins, developers are urged to formulate an on-chain reputation system and an on-chain limit order book (LOB) exchange.
In addition, tools to make the DeFi ecosystem more secure are also being requested.
“We recently launched Base, a secure, low-cost, developer-friendly Ethereum L2. Our vision is to collectively work towards an ambitious goal: bringing the next billion users on-chain. One of our values from the beginning has been “Base is for everyone” and we’re so grateful to see builders around the world starting to make Base their home,” the network commented.