The Crypto world has seen the effects of inflationary projects in the system but hasn’t experienced the power of an evolving deflationary system that aims at increasing the participation of her community through a decentralized and trustless system.
Before we dive deeper, let us take a closer look at the terms, ‘inflationary tokens’ and ‘deflationary tokens’. Inflationary tokens are those tokens which are regularly been released into the market over a specific period of time(most cryptocurrencies have a fixed supply); in traditional finance, fiat is minted at 2-4% yearly to offset debts and boosts the economy but this can lead to huge economic problems as seen in the case of Venezuela and Zimbabwe (these countries are experiencing hyperinflation), while Deflationary tokens are cryptocurrencies that grow in value via the diminution of its total supply whenever there’s a transfer of the said asset from one wallet to another. Deflationary tokens are removed from the market/ecosystem via token burning or ‘buying-back’ and have huge benefits as the value increases, investors can decide to stake in a pool to raise their capital and ensure liquidity. (Note: inflationary tokens are also stake-able).
Project Statera (STA) is a deflationary project, hosted on the Ethereum Blockchain which exhibits an agnostic effect on any system it's introduced to. It consists of a Native token, Statera (STA) which is an ethereum-powered deflationary token pegged to an index fund. These index funds include the values of four other cryptocurrencies in the market. They are Bitcoin (BTC), Ethereum (ETH), Chainlink (LINK), and Synthenix (SNX), each cryptocurrency was chosen due to striking peculiarities exhibited by them in ensuring a stable price system for the deflationary STA.
WHAT is STATERA?
Statera is a deflationary indexed token which works by introducing deflation into an already inflated system ensuring the creation of a stable coexistence of other products in its pooled system while creating a set of new assets and value for itself.
How does Statera differ from other projects?
Statera from design was created to be different from other deflationary tokens found on the market as it aims to be a ‘Deflationary currency’ of the world, this is because it is strategically tied to the influence of the other four cryptocurrencies as designed and thus positions itself to create a balance of these while creating a store of value for itself. The token is finance focus as it generates profound monetary policy when placed into any financial system or even an investment tool.
How does it achieve balance or stable price with its tied cryptos (token dynamics)?
Statera achieves balance by carefully implementing the balancing methodology; remember, it’s tied to four other cryptos; namely BTC, ETH, LINK, and SNX which is held at a ratio of 10%, 30%, 10%, and 10% respectively. The balancing pool can be found on Balancer, with all these crypto and a wrapped Statera to prevent deflation on the Balancer pools. The Wrapped Statera, when used on uniswap, creates the deflation in the pool it is currently being held. The wrapped statera is an ERC-20 standard token and consists of 20% STA and 20% ETH and it's called ‘DELTA’.
For price stability, amidst prevailing market prices, it achieves this by selling any tied asset that rises above the predefined ratios (this is as a result of a surge in its price per unit of the asset) and buys more Delta while if their values go down, Delta will be sold to ensure balance, all these are done by the index via arbitraging.
Also, Statera itself (via its algorithm) causes deflation on any transaction involving the token by burning 1% of the transaction value, i.e. any movement of Statera captured by the system will initiate a 1% burn of the value of that transaction, hereby causing an upward increase in the price of the token.
Benefits of statera to the crypto world
- Statera acts as a store of value hence rewarding HODLERs
- It acts as proof of balance
- Statera is community-driven and hosts a variety of pools with different indexes investors can venture in while providing value for their investment.
- When used in financial systems, statera introduces deflation of the instruments causing a reduction in the repayment of the credit/loan obtained.
In conclusion, Project Statera has been created to solve the issue of inflation noticed in the world via its unique design. As it continues to achieve positive value through the balancing mechanism via the pools it’s currently operating in. Statera on long term poises in becoming the stable coin for the DeFi ecosystem because of the power of deflation contained in it.
