SPOT, the Flatcoin project of decentralized algorithmic currency protocol Ampleforth, tweeted yesterday to announce the completion of its latest round of strategic financing, in which Coinbase Ventures also participated, investing US$1 million. It is reported that SPOT will also be launched on Coinbase’s own Layer 2 network Base in the near future.
Coinbase Ventures participates in Flatcoin project SPOT
The Ampleforth Foundation and the developer behind the protocol, Fragments, revealed that Coinbase Ventures invested US$1 million in Ampleforth’s decentralized low-volatility currency SPOT, another major step forward in the development of “Flatcoin” products.
Evan Kuo, CEO of Fragments, said that SPOT, as the result of its five years of research and development, aims to realize the vision of "better currency" through blockchain technology:
SPOT can build a better currency than just an on-chain replica of the U.S. dollar. Even if the latter meets the immediate needs of the market, we have been working hard to solve more important problems: inflation, durable stores of value, and centralization. media dependence.
It is reported that SPOT has been launched on Ethereum and will be launched on Coinbase Layer 2 Network Base’s decentralized exchange Aerodrome Finance next Monday.
What is SPOT?
As a decentralized and low-volatility digital asset, SPOT embodies the concept of "Flatcoin" and aims to become a substitute for today's legal stablecoins, combining the characteristics of currency and commodities.
How to achieve low volatility?
SPOT official documentation points out that the low volatility characteristics of SPOT are achieved by tranching the volatility of Ampleforth’s native token AMPL into two derivative tokens:
Senior Tranche: Generates low volatility SPOT tokens.
Junior Tranche: Generates stAMPL (the staking version of AMPL), absorbing most of the network volatility, thus protecting SPOT from significant price fluctuations.
Operation Mechanism
After users deposit AMPL into the SPOT protocol to mint corresponding amounts of SPOT and stAMPL, these graded assets will be bundled for a fixed period of one week and automatically converted back to AMPL upon expiration.
The SPOT protocol maintains the continuity of the protocol and limits the volatility of SPOT tokens by continuously recycling expired graded assets and replacing them with new graded assets, while transforming them into a value store with commercial applications:
SPOT spreads volatility into derivative tokens that cycle continuously, similar to other forms of perpetual contracts, with the goal of limiting volatility rather than eliminating it entirely.
It is reported that SPOT’s minimum volatility will track the 2019 Consumer Price Index (CPI)-adjusted USD, and when the above-mentioned tiered assets reach a fixed maturity, their volatility will be nearly consistent with the volatility of the AMPL token.
Coinbase CEO: “Flatcoin” is the next generation of stablecoins
Previously, as early as August last year, Coinbase CEO Brian Armstrong mentioned a new currency concept similar to the "Flatcoin" concept among the 10 "most interested" crypto ideas, suggesting that the company's investment department may pay attention to such product:
If you were to create a cryptocurrency-based currency, what would it look like? Completely decentralized, the Consumer Price Index is tracked through a special algorithm to maintain its purchasing power.
(Want to start a company but don’t know what to do? Let’s take a look at Coinbase CEO’s sharing of ten blockchain application trends)
Subsequently, Armstrong also stated in an exclusive interview with Yahoo Finance a month later that he would pay special attention to L2 solutions and Flatcoin:
Flatcoin is a better form of currency in the encryption field and the next iteration of stablecoins; although we have not invested in related development ourselves, we are very interested in it.
This article Coinbase Ventures participates in the SPOT financing of the Flatcoin project to create a low-volatility stablecoin alternative. First appeared on Chain News ABMedia.
