The story of Centric’s dual-token model!
We’ve all heard of cryptocurrency volatility. Yet, there are some stablecoins that are tethered to real-world value to maintain calmness.
The truth is that with stability comes a limited potential upside, which implies less or no profit. However, with volatility comes risk factor, since such currencies might have a large upside or, more crucially, a massive fall.
But, what if the same developing company offers both stable and volatile coins?
Let’s figure out who we’re aiming at!
What Is Centric?
Centric is a groundbreaking dual-token digital currency and decentralized blockchain system based on strong economic principles. Centric’s dual-token architecture encourages adoption and stabilizes over time by self-regulating token production to match changing demand.
Centric Rise (CNR) and Centric Swap (CNR) are the two tokens that comprise Centric’s dual-token concept (CNS). CNR is unusual in that it trades at a fixed price and yields hourly growth, whereas CNS is a conventional cryptocurrency that trades at the market price. Centric Rise can be redeemed for Centric Swap at any time, and vice versa.
What Is Centric Rise (CNR)?
CNR is a low-volatility cryptocurrency with predictable profits. Each Centric Rise unit is set to trade at a predefined and rising value over time, denominated in USD. This methodology is comparable to central bank monetary policy, except that it is a protocol-enforced algorithm, with economists first functioning as oracles to the blockchain and transparently fixing the price a year in advance.
Centric Rise is a new type of digital currency which differs from existing currencies or stablecoins. It is not a completely free-tradable token, nor does it fit the traditional definition of a stablecoin. Centric’s nominal value is stable, but its “functional” price fluctuates as a result of its tradable ecosystem token, Centric Swap (CNS).
What Is Centric Swap (CNS)?
Centric Rise has released a freely traded cryptocurrency called Centric Swap to give liquidity on the open market in the early stages. Centric Swap is a low-volatility, zero-sum crypto that is issued and destroyed on demand to aid with the liquidity of Centric Rise.
Users can purchase Centric Swap by purchasing it from licensed brokers or platforms, or by exchanging Centric Rise to Centric Swap utilizing the decentralized Centric convert protocol. Centric Swap is linked to 1.00 USD worth of Centric Rise on the conversion protocol but is not backed by any assets, distinguishing it from stablecoins.
Why Dual Token Model?
Price volatility is seen to be the most significant barrier to the widespread adoption of cryptocurrencies. Unlike fiat currencies, cryptocurrency does not have a central authority to execute monetary policy aimed at stabilizing purchasing power. As a result, variations in demand cause enormous price volatility.
The decentralized mechanism of price discovery has reduced the bulk of existing cryptocurrencies to stocks or commodities, valued on emotion, traded on uncontrolled stock exchanges, and vulnerable to manipulation.
Because volatility costs money, a lack of pricing stability has inhibited the formation of credit and debt markets. While the rest of the industry is focused on transaction throughput and smart contracts, Centric is focusing on pricing stability in order to achieve the economic advantages enabled by blockchain.
Centric’s one token addresses this stability issue, while the other responds to investors’ desire to benefit from cryptocurrency volatility!
Why They Say Centric Is Different?
According to the official website, Centric is different in the following four ways:
Governance: Centric is controlled by the Centric Foundation, a non-profit organization whose mission is to increase adoption by building partnerships and funding creative projects that enhance the usability of Centric.
Detailed Roadmap: Since December 2017, Centric has consistently delivered on its roadmap. The Centric Foundation is planning a 10-year roadmap of products, services, collaborations, and regulatory compliance.
Rewarding Adoption: The exchange rate between Centric Swap and Centric Rise in the Centric economy rises by a tiny amount every hour. This suggests that it is advantageous to hold Centric Rise. Growth is higher early in the project and will gradually decrease to a targeted 4% each year.
Maintaining Stability: Centric’s dual-token concept establishes the foundations for a synthetic-stable currency. The Centric protocol steadily regulates the supply of Centric Rise in order to elevate the on-market rate of Centric Swap to $1 USD.
The Bottom Line
Centric looks to be a viable concept geared at sustaining stability while rewarding investment. However, we have recently witnessed the demise of an algorithmic stablecoin in the form of Terra Luna. This failure has generated several questions about the stablecoin economy structure. Although Centric positions itself as unique, it is still theoretical to a large part and requires rigorous examination before any consideration.
The content provided in this article is not sponsored and is correct upto the best of my knowledge. This article is not financial advice and we are not responsible for any action taken in response to this article!
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What if a crypto is both stable & volatile? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.