#266—What are flatcoins?

Stablecoins are evolving

Sep 18, 2023

Welcome to Yaka Stuff, our weekly newsletter that covers news, industry perspectives, and updates from the Hard Yaka ecosystem. Check out our last report here.

This week:

Flatcoins
More arrivals at the Bitcoin ETF party
The Binance Docs
SBF is a prolific writer
Vitalik is on Farcaster
Stuff happens

1. What are flatcoins?

The idea has been around for a few years—Balaji mentioned them back in 2019.

Now Brian Armstrong has mentioned it as part of his 10 ideas he’s most excited about in crypto at the moment.

Here’s Brian Armstrong speaking to Yahoo:

Yeah it's a new thing on the horizon. There's a couple teams working on it. We're not building something in that realm yet, but we're interested in it.

The concept is straightforward. Flatcoins are essentially a type of stablecoin that tracks inflation.

(It’s not surprising they’re suddenly in vogue with inflation back.)

The appeal makes sense. Something like Bitcoin is deflationary and volatile. Meanwhile, 1:1 backed stablecoins are a little too stable.

And if you think about it, the whole stablecoin thing is a much better trade for Tether than it is for you.

Here’s Richard, speaking to Decrypt: (He’s the pseudoanonymous co-founder of International Stable Currency (ISC), a flatcoin.)

"Existing US Dollar-pegged stablecoins are not only inflationary, but they are also border-line predatory,” Richard, the pseudonymous co-founder of ISC, told Decrypt.
He added that current stablecoins take customer deposits and invest them at their discretion. "When market conditions are good, they make billions in profit. When market conditions are bad, users are holding depegged stablecoins. This means users are taking all the risk while the big boys are taking all the returns on that risk," he explained, adding that the "best-case scenario" is that "nothing blows up, but their purchasing power gets eaten away by inflation."

And indeed, a few projects already exist. Here’s Decrypt:

There are a number of projects currently building flatcoins. Nuon, which claims to be the first true flatcoin, is an inflation-proof coin built on Ethereum.
Spot, meanwhile, is pegged to the cost of living in the United States, whereas Solana-based International Stable Currency (ISC) is pegged to a mixed bag of assets including bonds, treasuries and gold. Others, like Collypto, track real estate and commodities for collateral.

Relevant:

2. Franklin Templeton joins ETF party

Along with Blackrock and Fidelity. Here’s Blockworks:

The firm, which manages nearly $1.5 trillion in assets, revealed in a Tuesday filing that it intends to list such a fund on the Cboe BZX Exchange.
The Franklin Bitcoin ETF would be a “series” within the Franklin Templeton Digital Holdings Trust, the document notes. It intends to “reflect generally the performance of the price of bitcoin before payment of the fund’s expenses.”
The ETF’s shares would be backed by bitcoin held by Coinbase Custody Trust Company, the fund’s custodian.

3. Keep an eye out: The Binance Docs

Here’s BeinCrypto:

The new court order demands the unveiling of 16 documents. Additionally, nine others will be partially disclosed, with redacted versions available to the public.
The release dates are set for the coming weeks, barring potential opposition. This move will shed light on the SEC’s reasons for originally sealing these documents in its case against Binance.
A former SEC official, John Reed Stark, hypothesized that these concealed documents might pertain to criminal accusations against Binance US. Therefore, this court ruling could dovetail with the SEC’s claims regarding Binance US’s uncooperative approach and purported opacity during the agency’s investigation.

Relevant:

Binance.US says CEO Shroder to depart, 100 jobs will be cut

4. What people are reading: SBF is a prolific writer

250 pages, to be exact.

Here’s the NYTimes:

“I’m broke and wearing an ankle monitor and one of the most hated people in the world,” he wrote. “There will probably never be anything I can do to make my lifetime impact net positive.”
He added: “And the truth is that I did what I thought was right.”

Relevant:

5.Vitalik on Farcaster

The trendy thing these days is to be on your own social media platform. Apparently, Vitaliks is on Farcaster.

Here’s Axios:

What we're watching: Vitalik has apparently switched over to Farcaster. This tweet has a screenshot of him posting there.

Farcaster is one of a crop of web3 social apps out there (really more a platform for many apps...). It describes itself as "sufficiently decentralized."

Of note: Vitalik is probably the most influential person in all of crypto. That's debatable, but... he's up there.

It would be way too early to say that this is the start of anything. But it's also not nothing.

By the numbers: As of this morning, he has 8,832 followers on Farcaster. He has 4.8 million on Twitter.

Data from Dune shows Farcaster still has less than 20,000 users.

Yaka Stuff

#266—What are flatcoins?

Stablecoins are evolving

1. What are flatcoins?

2. Franklin Templeton joins ETF party

3. Keep an eye out: The Binance Docs

4. What people are reading: SBF is a prolific writer

5.Vitalik on Farcaster

6. Stuff happens

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