The Dawn of Gold Rebasing Money
A new cryptocurrency is bootstrapping and it is pretty cool to observe the process from day one. This article is a quick look at a cryptocurrency that should always equal the price of 10mg of gold.
This gold-pegged cryptocurrency is a tad Bitcoinesque in the sense that the team/person behind it has a penchant for anonymity and that the supply is limited. Furthermore, it seems to be created out of thin air. Looks can be deceiving though.
The token is actually being mined (yield farming explained). Supply is issued to those staking certain select cryptocurrencies. For now the thing to know is that this fledgling cryptocurrency is supposed to track the price of 10 milligrams of gold and that the supply is only 30 million.
The Fundamentals
Given that the quantifiable supply of gold on the planet is around 1.98e+14 milligrams, a 30 million token issuance seems arbitrary. Who knows how the 30 million figure was derived but, thanks to the pioneering of Ampleforth and the engineers behind the YAMv3 code, there is a new synthetic commodity money in town.
A synthetic commodity money is artificially constructed to track the price of a commodity. The commodity is known as the underlying asset and in this case it is 10 mg of gold.
The Token
The token is an ERC-20 token on top of the Ethereum Network that uses the ticker AUSCM [pronounced ˈôsəm or “awesome”]. Auric Finance (an unknown team) is behind the token launch. Using gold prices as the base, they adapted the Ampleforth approach of changing the supply of tokens whenever the price deviates 5% away from the target price.
Adjusting the supply of tokens in this manner is called rebasing. The token launched over 24 hours ago and the first rebase is supposed to happen very shortly.
The token is presently traded on Uniswap against Ether (or ETH) and it appears that the folks at Auric Finance tied up 300 ETH in the pool through Unicrypt. Unicrypt offers a facility that enables token developers the ability to prove liquidity for future investors. These days the Ethereum Network boasts a service for every need and this one was used to lock up the 600 ETH for 6 months.
The Appeal
600 ETH is presently 248K USD. This is just big enough to scare away whales (larger investors). That means it AUSCM is a fun token for smaller investors to mess with. Especially now that the price is only 4 cents according to DEX Tools.
The theory behind rebasing insists on supply adjusting to demand. The present price indicates that the synthetic is way off its mark and that the supply issued needs to decrease to reflect that.
There are impermanent loss implications for those staking in the AUSCM-ETH Uniswap pool, but this farm is up and running. Wealth is being created.
Disclosure: I am presently farming AUSCM because I think there is potential utility to this coin and I want to learn more about rebasing coins at an incipient stage. This article is not investment advice and there are many dangers to speculating on anonymous projects.
