Distributed monetary system Havven has announced the launch of its stablecoin, which aims to combat one of the biggest problems of cryptocurrencies at the moment: volatility. Havven’s blockchain-based solution seeks to achieve price stability with respect to an external asset.
The platform is composed of two tokens: stabilized exchange tokens, called nomins, and the reserve tokens that backs them, called havvens.
Unlike Bitcoin, which has a fixed monetary policy that does not allow it to adjust to changing demand for the currency, Havven has developed a system of currency which backs itself. This method of stablecoin and reserved collateral is a simple solution to the problem of stability.
It is designed to provide a practical medium of exchange, a stable cryptocurrency useful for everyday economic purposes, and to accelerate the adoption of blockchain technology to improve the technology of money. The token sale is planned for February 2018.
Havven offers a digital method of payment that fulfills the same three functions that traditional forms of money and asset-ownership do: act as a unit of account, a medium of exchange, and as a store of value. The recent impact of technology on transaction methods has improved and encouraged market accessibility and economic growth. Credit cards, stocks, and online accounts are all modern methods that, while invisible, have demonstrated how technology can strengthen progress and trade.
While Bitcoin is the first technological advancement to truly break ground in the world of finance by detaching from any central authority, its increased adoption and constant value growth is setting up the currency for potential short-run volatility, with no mechanism that can adjust to the changing demand. Bitcoin, while being a great store of value, cannot act as a unit of account nor as a stable medium of exchange. The Havven system is a novel form of representative cryptocurrency that uses a stablecoin to attain the steady value of such fiat currencies as the US dollar, while retaining the desirable characteristics of bitcoin, such as transaction immutability and decentralization.
The Havven system is being released as an open source protocol built on the Ethereum network to further enable the development of decentralized systems and platforms. The team chose this approach to emphasize its transparency, as well as reinforcing their confidence in the system. They decided that creating a company or a closed source project and charging for access to the system would oppose the most important principles of the crypto community: egalitarianism and fairness. The licensing used for the project will allow any person or business to use the code to integrate or implement the protocol, which will drive adoption.
The stablecoin used by Havven is a cryptocurrency designed for price stability, such that it can function as both a medium of exchange and unit of account. The asset used to back the coin is the pool of reserve tokens contained within the system itself. Havven generates fees from users who transact in the stablecoin and distributes them among the holders of the reserve token, compensating them for maintaining the system. Thus, by rewarding those who actively participate in maintaining the reserve and modestly charging those who passively utilize the currency, Havven establishes a monetary system that incentivizes participation, while also sustaining and reflecting a growing value.
To maintain stability, Havven is designed to accommodate certain market incentives, which will manage the supply of the exchange token such that its price mirrors that of the asset it tracks. Havven’s system generates cash flow for participants, creating a market value that can be used as the collateral to support the stablecoin. In order to keep the crypto economic system decentralized and trustworthy, each user has full transparency over how many tokens have been issued against the available collateral at all times.
The stability of the Havven system creates a cryptocurrency useful not only for everyday economic purposes but also for accelerating the adoption of distributed ledger technology and decentralized marketplaces. Havven’s freedom to over collateralize its pool of circulating currency allows the system to insulate itself against any dramatic corrections in the havven reserve token. This also relieves it from the obligation to respond to any macroeconomic conditions in the fiat markets. Thus, Havven acts as a bridge between fiat currency and cryptocurrency — a hybrid of the two technologies that possess the advantages of both.
[perfectpullquote align=”full” bordertop=”false” cite=”Kain Warwick, founder, and CEO of Havven” link=”” color=”” class=”” size=””]“There is currently no effective, decentralized unit of account. Through my experience with the founding of blueshyft, I understood that in order to accelerate crypto adoption, we needed a stable currency that all people and businesses could understand. With Havven, we are creating an open-source protocol with the goal to create the first trustless stablecoin.”[/perfectpullquote]
Discussion about this post