September 12, 2022
The last two years have seen a dramatic rise in inflation rates around the world. US inflation hit a 40-year high of 9.1% in June, according to the Consumer Price Index (CPI). Inflation in the UK reached 14.9% this month and is predicted to rise to 22% in early 2023. For the EU as a whole, annual inflation reached 9.8% in July 2022. Meanwhile, countries like Argentina and Turkey saw inflation soar to 70% and 80% this summer.
Just to put this in perspective, with an annual inflation rate at 9%, the inflation halves the value of consumers’ money in roughly eight years. Inflation is a serious problem for everybody. Consumer goods prices rise while salaries generally remain stagnant, reducing personal purchasing power, savings and pensions year after year. The only thing that tends to keep up with inflation is real estate prices, which only serves to make home ownership a more and more difficult proposition for many.
Back in 2009, ‘Satoshi Nakamoto’ created Bitcoin as an alternative to fiat for the billions of people fed up with the inadequacies of the world’s economic system. A wide number of cryptocurrencies quickly followed in Satoshi’s footsteps, leading to the advent of stablecoins to meet the demands of consumers who required a less volatile store of value. However, while cryptocurrency and stablecoins have proven to (sometimes) be a more convenient payment solution, they fail to solve the most pressing problem that plagues users of fiat — inflation.
Clearly, something must be done.
Nuon is better money than fiat or other cryptocurrencies. Nuon is not a stablecoin per say— it’s a flatcoin, meaning its value is flat with respect to inflation. This is achieved by matching Nuon’s price to the value of a basket of goods, and adjusting it for inflation daily. While inflation causes the purchasing power of the US dollar to drop year after year, the value of Nuon will actually rise by the same amount, making it an extremely stable store of value.
Instead of adjusting to the CPI’s ‘official’ inflation rate, which uses century-old methods and only updates once a month, Nuon uses an independent and transparent inflation index called Truflation to calculate the true rate of inflation. Truflation is a blockchain-based, cryptographically verifiable index that updates every day using census level data from more than 10 million data points and over 30 different sources. The difference in accuracy is staggering — the US government-reported inflation rate for H1 2022 ranged between 7.5% and 9.1%, while Truflation’s authentic, unbiased calculations pegged the real US inflation rates between 9% and 12%.
The US inflation rate has strong implications on the cryptocurrency industry as well, where 99% of all stablecoins are pegged to the US dollar. Stablecoins have become the backbone of decentralized finance, yet they depreciate at the same rate as the US dollar, an untenable situation at best for an industry seeking better forms of alternative currency. Nuon flatcoins are the answer to this problem — they are not pegged to fiat, and are therefore not subject to depreciation due to inflation, nor to regulation coming soon to centralized stablecoins in the US and many other countries.
Nuon is an overcollateralized currency, meaning that there is always more crypto as collateral than Nuon in the market. Overcollateralization helps ensure that Nuon always maintains its full value, even when market conditions are poor or unpredictable.
Nuon will be available on most crypto exchanges. The price at launch will be $1 US per 1 Nuon, but it will adjust over time at the same rate as inflation — when you sell your Nuon later, you will receive more that 1US$ per Nuon in return and your purchasing power will have been protected. Nuon is the ideal inflation hedge.
Nuon is also a decentralized cryptocurrency. It can be minted by anyone who deposits collateral through the Nuon Protocol App — which is the only place where new Nuon flatcoins can be created.
There are many financial incentives to motivate participation in the Nuon Protocol by minting Nuon, including unique yield opportunities on collateral and security enhancements in the form of automated liquidity pools, compounding yield, adjustable collateral ratios and tradable NFT-based liquid positions, all at 0% interest rate. Nuon will also provide extensive arbitrage opportunities and strong enticement to provide Nuon liquidity on crypto exchanges, and other decentralized finance (DeFi) platforms.
Price volatility has prevented the first cryptocurrencies from functioning as units of account. This function of money is critical for a currency to be able to act as a unit of measurement of the monetary value/cost of goods, services, or assets. It is one of the well-known functions of money.
Stablecoins were created as an attempt to produce a cryptocurrency that can serve as a unit of account without the volatility. That has resulted in currencies that are either highly centralized and censorable or unpredictable. And they are also negatively impacted by inflation, as they devalue at the same rate as Fiat.
Nuon is simply better money: a stable, predictable and secure flatcoin pegged to inflation to protect personal purchasing power for years to come. Nuon will be easily available and redeemable.
We have exciting plans for Nuon: the Nuon flatcoin is only the first in a family of flatcoins to be rolled out. Future offerings will include commodity-backed flatcoins, such as Nuon Oil and Nuon Wheat — all with their related commodity pricing mechanisms adjusted to create flatcoins that remain flat to their respective commodity.
Nuon’s mission is to solve real economic problems through the use of blockchain-based crypto assets. The flatcoin is the first of its kind.
Nuon is launching in Q3 2022. For more information and all the latest updates about Nuon, visit our website and engage with us on Twitter, or Telegram.