Coinbase Wants to Support Flatcoin Projects

Coinbase, the largest US cryptocurrency exchange, has come up with the idea of an inflation-proof stablecoin model that preserves its purchasing power. In the post published by Coinbase, the exchange announced that it is interested in a new stablecoin model called “flatcoin”. The exchange officials said that highlighting the potential of stablecoins is much more important during this period, referring to the recent banking crisis.

Stable cryptocurrencies are expected to be of equal value to the values of the assets they link. While dollar-fixed assets stand out in the industry, crypto investors frequently use such cryptocurrencies to protect themselves from the volatility in the markets. This ensures that the transaction volume in the fixed cryptocurrency sector is quite high. It is thought that the creation of an inflation protection layer proposed by Coinbase can increase the demand for fixed assets by providing a protection against price pressure, especially in the post-pandemic period.

To support such efforts, Coinbase announced a new layer-2 Blockchain network Base last month that supports faster and lower-cost transactions on the Ethereum network. In addition, the company announced that it has established a fund to support projects to be developed on Base. In the market dominated by USDT and USDC, these assets are backed by cash and highly liquid bonds. While the algorithmic stablecoin was basically trying to maintain its stability with crypto assets with high market value, this system was hit hard by concerns about sustainability after the collapse of TerraUSD.

The stable crypto money system that Coinbase wants to support at this point is the assets that are not supported by fiat money, alternatively, assets that are called “flatcoins” that act as a bridge between fiat-backed assets and crypto assets. Coinbase also talked about its intention to support projects that protect the identity of individual users on Blockchain networks and can make decentralized finance more secure.