Swiss crypto startup Eidoo will tie cryptocurrency to the price of actual gold, seeking to create a trustful and more stable ecosystem.
Switzerland-based crypto startup Eidoo, a multycurrency wallet and a hybrid exchange, makes a step forward to a more stable token ecosystem. As it has recently been announced, the company is going to tie its cryptocurrency Ekon to the price of actual gold. Such a unique solution guarantees more stability to the public, in comparison to other tokens.
According to the company’s team, the ERC-20-compatible token Ekon will be available on the Eidoo multicurrency wallet and decentralized exchange. It will be redeemable for one gram of 99.9% fine gold, which will be stored in its vaults and audited every 90 days.
Moreover, in order to make the token even more trustful, the company will provide users with the possibility to see the gold stored in the security vaults via a video camera.
According to Natale Ferrara, Eidoo’s founder:
“Each Ekon token will be backed by … [24-karat gold], so we will issue new tokens only if the gold is available and only if the user has completed the KYC and all the legal requirements that the Swiss law requires. People will be able to see the gold stored in the security vaults through a video camera, we will post a link on the website so everyone can control the gold.”
The revenue from buying and selling Ekon stablecoin within the Eidoo’s ecosystem will be converted into the company’s native EDO token. Ferrara also said that fees will be assessed if anyone wants to trade in their crypto token for an actual gram of gold.
Despite the uniqueness of the solution offered by Eidoo and its huge potential during the current stablecoin rush, not all the experts agree with its usefulness, as the metal’s price isn’t really as stable as it can be considered.
According to the data from APMEX, the gold’s price is currently $150 lower than it was this spring, but $25 higher than it was in September.
As Dr. Wang Chun Wei of Australia’s University of Queensland explained:
“Benchmarked against the USD, gold is not necessarily ‘stable. Most exchanges (and investors) use USD as the reference currency, hence it makes more sense for the stablecoin to be based on that reference currency.”
Kyle Samani of MultiCoin Capital noted:
“I think it’s hype. Doesn’t change anything.”
However, for those, who want to look at all their assets in one place, including a gold hedge against the risk of the crypto market, Ekon will be exactly what they need.
Among the currently existing stablecoins, Tether, which is backed 100% by actual fiat currency assets, still remains number one in the field. But after the token has been accused of falsely issuing tokens without actually having the dollar reserves to back them, its reputation is rather controversial.