Price-Stable Cryptocurrency Project Basis Raised $133M from Top Investors

| Updated
by Bhushan Akolkar · 3 min read
Price-Stable Cryptocurrency Project Basis Raised $133M from Top Investors
Photo: Pixabay

Basis’ Stable Coin is believed to help curb volatility by adjusting the supply depending on the demand while keeping the value of each token around one USD.

Basis, a Hoboken, N.J.-based cryptocurrency startup has recently raised $133 million for developing a new crypto-token called “stable-coin”. As the name suggests, the new crypto-token will be having an elastic supply, which will keep its value about a dollar, unlike the other digital currencies wherein price fluctuates based on speculations and demand.

One of the basic purposes of “stable-coin’s” launch is the creation of a digital currency token, which can actually be used as a reliable payment method instead of having a limited utility for the trading purpose only. Basis also aims to blend the merits of cryptocurrency with the centrally controlled fiat currencies. Central banks help to curb the volatility through its monetary policies.

Chief executive Nader Al-Naji revealed that in order to maintain the price of its cryptocurrency, Basis will make use of the supply and demand criteria using an algorithmic protocol. When the demand is very high, the protocol will increase the supply of the ‘stable-coin’ tokens while when the demand is weak, it will reduce the supply.

Al-Naji further stated that in case of other digital currencies, the supply is fixed, which translates into extreme volatility making them unreliable means of payment or regular expenditures. According to Naji, if someone is receiving 1 BTC as a salary and if its price drops tomorrow, they may not meet the expenses.

In such a way, Basis aims to bring the benefits of the digital currency without introducing volatility. The newly created ‘stable-coin’ or Basis tokens shall be distributed to those participating in the system and thereby make the monetary expansion in a decentralized manner.

Al-Naji believes that if Basis shows its ability to accomplish its goals, it will create a huge benefit in improving the efficiencies of developing nations’ economies. TechCrunch noted that the project’s founders – Al-Naji, Lawrence Diao and Josh Chen – are considering developing nations as one of their biggest targets.

The founders are also exploring the crowdfunding market that can make use of this digital token believing that crypto exchanges will be attracted to the ‘stable-coin’ token that is not prone to wild pricing fluctuations.

The latest round of funding has been contributed by a diverse group of backers, including  Lightspeed, Foundation Capital, Andreessen Horowitz, Wing VC, NFX, Bain Capital Ventures, GV, Stanley Druckenmiller, Kevin Warsh,Valor Capital, Zhenfund, INBlockchain, Ceyuan Ventures, Sky9 Capital and others.

Apart from this, Basis, based on its private placements, has gained immense support from other financial institutions like venture capital firms and some crypto-hedge funds. Other backers, in addition, include application developers, crypto exchanges, blockchain wallets and economists.

Investors Affirm Trust in Stable-Coin

Salil Deshpande, managing director at Bain Capital Ventures says in a Medium blog that a stable crypto token allows for streamlined systematic trading without incurring a lot of volatility risks. It can also bring more accountability in the economies of developing nations.

Deshpande also noted that the coin can serve as a global store of value and a medium of exchange in some countries with unreliable central banks.

Altcoin News, Cryptocurrency News, News, Token Sales
Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

Related Articles