Cryptocurrency News

Stablecoins and Stability: How Element Zero Is Doing It Differently

Stablecoins are cryptocurrency that has total amount secured to other assets. Some examples include USDC, Tether, DAI, Gemini Dollar and Pax. Presently, cryptocurrency has gained a lot of popularity and blockchain technologies opportunities allows corporate investors and institutions to invest greatly in the cryptocurrency market. Although the current volatility facing the market can be appealing for some, sensitive investors at the institutional level cannot withstand such a high level of risk. However, a stable cryptocurrency would work perfectly for these kinds of investors well, because it would enable them to enter a volatile market knowing fully that there is always a digital “safe-haven” which add more value. The term “stablecoin” would benefit from the speed, liquidity and security of cryptocurrency while preventing the effects of volatility and, in some cases, also the level of inflation.

The stablecoins work as a connection between the world of fiat currencies and the world of cryptocurrency. Many companies make use of some centralized authorities which provide support to every coin with the one-to-one equivalent in Crypto or USD and controls the price volatility.

Apart from volatility, another reason why a stable cryptocurrency is important to institutional investors is the low fees linked with blockchain transactions. Investing in local asset involves a high number of taxes and fees which is associated with transfer fees, investment fees, exchange fees, attorney fees, broker fees, and of course, whichever taxes apply in the investor’s location. In contrast, cryptocurrency transactions only require a little network charge (including the exchange fees and possibly taxes). Since the transactions are verified on the blockchain, investors have complete clearness and trust of their trades. This makes it simple for investors to accept the local legislature regarding taxation on cryptocurrencies.

Stablecoins or cryptocurrencies, in general, provide a special avenue for international investors to conduct their business with ease across borders with low fees compared to the previous charges. The low-cost transaction fees have saved a lot of institutional investors millions of dollars yearly, and transactions are accomplished within a few minutes not days. This provides an effective fluid system with fewer limitations and boundaries which costs its investors fewer fees compared to the traditional assets in every transaction.

However, it is obvious that the most commonly used stablecoin (Tether) has some challenges,  and due to its centralized nature, the issue of doubt and mistrust which Tether has faced so far could easily continue. Regardless of the holdings proof, this type of controversy will occur any time they increase the supply of USDT. This is usually intrinsic with centralized systems, so it is more likely that the stablecoin approved by institutional investors will require a decentralized system.

Element Zero’s Stablecoin Platforms Conveys True Stability

Element Zero is a non-profit next generation payment network which is based on an algorithmic stablecoin creation platform. However, Element Zero is designed to provide a better world by incorporating a new payment option that is secured against long-term inflation and removes the possibility of any volatility. Element Zero stablecoins are powered using the decentralized Stability Protocol and a new algorithmic method that removes the opportunity to sell Element Zero stablecoins below or above the set price to overcome inflation.

The liquidity protocol is a new methodology which was designed to endure cryptocurrency problems with the use of a hybrid collateralized or non-collateralized protocol. This is managed dynamically by machine learning established on the Fractional Reserve Multiplier Effect. Also, modern banks use a similar method to create liquidity.

The introduction of a decentralized stablecoin will have a great impact on the integration of global finance using crypto finance which is important for the long-term growth of the whole cryptocurrency market. The well-known adoption of a true stablecoin would help individuals, merchants and more importantly retailers to depend on a decentralized financial network without volatility. Element Zero will transform our idea about payments by providing a feature-rich, smart and open-source stablecoin payment solution.

Test the Element Zero  protocol for yourself on the Element Zero Testnet

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