What is the Carbon Finance stablecoin? A stablecoin is a digital asset pegged to a stable fiat currency such as the USD. The use of the stablecoin in DeFi is a cornerstone for intelligent investing. Stablecoins provide an excellent way to hedge during times of market volatility. Stablecoins are also used as a safer and more consistent value token in trading pairs because the investor isn’t put into as much risk for impermanent loss.
There are many methods of issuing a stablecoin that can maintain a market value peg. There are stablecoins in existence today that are 100% fiat backed such as USDC. There are others that are backed by crypto currency such as DAI. There are also others which are algorithmically stabilized such as MDO or BDO which were forked from Basis, ESD, DSD.
We’ve decided to go somewhere in the middle. The main issue with Fiat-backed stablecoins is that they are not 100% decentralized (USDC) and crypto-collateralized stablecoins (DAI) have issues with over-collateralization. The purely algorithmic stablecoins on the otherhand provide a noble solution to maintain the consistency of stablecoins without any fiat backed assets, however they tend to overreact during big corrections and are based 100% on the faith of the investors. The result of this is that most purely algo-stablecoins end up below peg and are unable to establish peg once again when they fall too far below.
In comes Carbonfi.finance — we’ve been inspired by FRAX and IRON by creating the similar approach. We have created CARB — the first partially-collateralized stablecoin that aims on creating other major currency stablecoins on the roadmap.
The CARB protocol makes use of 2 tokens to achieve it’s goal: GRA and CARB.
GRA (Graphene) is the share token of the carbon finance ecosystem. It serves as part of the collateral behind CARB. Backed by seigniorage revenue as well as the value of any excess collateral.
CARB (Carbon) is the stablecoin pegged to $1. This is partially backed by a continuously adjusting ratio of collateral equal to $1 in value.
For our exciting roadmap, we will be developing other tokens that are pegged to the top fiat currencies in the world.
Prepare yourself for the crypto and currency evolution with carbonfi.finance