NODR Network: A New Approach For Stable Coins
In this article, we are going to reveal our stable coin vision a little more.
NODR is a project based on blockchain technology primarily as a marketplace with user-friendly functions. We aim to make our tokens stable in order to fulfill our mission to introduce the next decentralized internet for anyone who joins NODR network. Taking into account the story of Bitcoin, the rise and fall of altcoins and the growing issue of stable coins we also aim to provide a reliable digital product with stable tokenomics.
Speaking of digital finance
Decentralized web technologies open a new era of digital finance today. More and more startups strive to find the golden middle balancing between what to create and make it unique as well as comfortable and useful, and how to make it possible as well as not that expensive or risky. So at the same time, to stay in trend and in demand. E-commerce evolves too. The way how people buy and sell online turns to be direct with no intermediary, and marketplaces for these deals are highly popular. Same with trading, gaming, gambling and much more. Internet requires self-regulated digital money. IT projects are ready to introduce their tokenomics. Explain to people how it is going to work, what token is equal to, how to convert it or store or exchange for some services. All the same actions as for fiat money now are possible with digital money. One of the main reasons that limit the ability of cryptocurrency to become globally available, accepted and convertible is token price volatility.
When each time you play the same game the same way, the result is the same. NODR team believes that to be ready to change the result one must change the rules of a game. In the case of stable coins, one has to focus on the changes in the global net itself. The key functions of the digital product operation today are the process decentralization, P2P technologies, and the distributed network. Coupled with the blockchain to hold financial operations in items like tokens, the core features of a project become much more attractive, profitable and topnotch for users. Once the price of a token is stabilized by online service market price (which is provided for the exchange of tokens), not fiat money rate, then a true stable coin will appear to make a basis for a stable tokenomics to be applied in any of online spheres of finance.
Based on faith
As we mentioned in the previous article, traditionally, there was the only way how to make a coin stable: to declare any certain price or just $1, just to make things easier. Ok, the idea looks good — let’s tie it to the USD and see what is going to happen. The USD stable coin appears. In fact, the stability of its price 1 coin = 1 dollar is also based on faith. People do not sell it much cheaper than $ 1 and do not buy much more expensive. It is just such a collective faith, which is based on the number of fears of each individual: “if I sell it much cheaper (or buy much more expensive), then the price will not move in my direction, and I will lose.”
The trick is that if everyone suddenly starts selling cheaper than a dollar, then no mechanism will keep this price of a coin. It’s like if everyone ran out of the bank because they do not believe in bank system anymore (and did you know that in the bank where you have an account there is enough money to cover only 10% of all deposits?). Apparently, the idea of a stable coin via USD or another set amount of money doesn’t work.
Based on product
NODR stable coin is unique in its own way. It binds coin supply to what is on the blockchain itself to the amount of traffic being delivered through NODR. So the whole story is as brilliant as simple: the more nodes join the network, the more traffic they deliver, the more it is reflected on the blockchain, the more tokens are minted, and the price of token sticks to the market price of the web traffic. Applause!
Therefore, we can say that the value of our token is not a single belief in its rise or fall (and not the fear of selling cheaper or buying more than the most), and this value depends on the market price of the traffic. We do not know the exact price and do not manage it. It may change in the future. All we can “guarantee” is that formula of minting and burning shall reveal “fair” or “equilibrium” price of the token if you reach a certain amount of traffic. Which amount of traffic? The amount that is proven to be delivered with NODR network, the amount that is recorded on the blockchain, and it will be transparent for anyone.
From where the demand for tokens appears initially, you may ask. Our answer is — online broadcasters. Pay TV and OTT services already pay for traffic delivery daily. Also, traditional centralized solutions and even the biggest CDNs are just not scalable enough and can’t handle the growing demand.
However, the tokenomics issue is very dramatic, even for stable coins. We at NODR are going to design it the following way: first of all, we tie the token price to the traffic price to balance the quantity of the traffic and the number of tokens as well as the number of minted and burned tokens. Thus, we will find out a fair market price for the СDN traffic and will stick to this. Also, we will apply the price balancing formula. Our team states that the attempt to an equilibrium state between token price and token supply is a backbone for the project economics and the first ever for blockchain itself. The new tokens injection is the driving force for the blockchain. There must be another force which counterbalances its growth. We found out the turning point when the equilibrium state is going to be achieved and justified, and there will be no more senseless appearance and destruction of tokens. In our next article, we will talk about it in details.
