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Havven, an Ethereum blockchain-based cryptocurrency payment network designed to function as PayPal or credit card networks, is now attempting to get traction with its stablecoin.
While Havven's existing currency (HAV) is not yet in many exchanges, the payment network is gearing up to put the Haven token and Nomin Stablecoin on the EOS blockchain. (It is already on the Ethereum blockchain.)
For those who do not know, stablecoin are simply cryptocurrencies that try to keep a constant price compared to other goods, usually US dollars. But even stablecoin for other non-fiat currencies and assets come online. Havven & # 39; s is one of them.
What is Haven?
Havven is designed to be a decentralized and self-sufficient payment network that allows users to store and transfer value without relying on legal money or external guarantees.
In essence, Havven's goal, as outlined in its white paper, is to create a decentralized alternative to SWIFT, PayPal, credit cards and other centralized payment networks that have "absolute control over value. within the network, then any transactions conducted within them can be blocked or canceled at any time. "It should also be noted that in centralized payment networks, rates are typically much higher than the cost of maintaining the network. , with increasing profits that motivate companies rather than quality and accessibility.
The Havven approach uses the collateral reserve of the Havven token (HAV) reserves, which supports the value of the secondary cryptocurrency Nomin of the network, a stablecoin with a floating offering designed as a secondary mechanism to stabilize its price.
At the time of writing, Havven launched only one type of Nomin, the nUSD, which is supported by HAV, but plans to introduce "multi-currency nominations" by the end of November 2018 (nEURO, nAUD, nJPY, nKRW and nXAU) .
Havven vs. Other Stablecoins
There are several ways in which the stablecoin stabilize their prices against the fiat.
The stablecoin collateralised by Fiat store the currencies issued by the government (eg USD) to support their value, keeping the same amount or more of the legal currency as there are circulating stablecoin. Although supported by fiat, this method requires users to trust a central entity and / or its auditors.
The stablecoins guaranteed by criptovaluta solve the problem of having to trust a central entity, but they create another problem relying on the volatile prices of cryptocurrencies to support them. Even if a stablecoin is significantly over-guaranteed, there is no guarantee that the value of the guarantee will maintain sufficient value. MakerDAO is probably the stablecoin supported by the best known cryptocurrency. As mentioned, this is partly the way Havven works.
Unsecured coins, meanwhile, try to control their money supply to influence the price on the market. For example, if the value of a stablecoin falls, the controlling entity may buy coins with reserve capital and could lock them off the market or burn them (destroy them). If the value increases, the coins can be minted (created) and placed on the market. This can be expensive and is obviously limited by the amount of spare capital available. However, some cryptocurrencies use different types of mint-and-burn approaches. Havven, for example, relies on network participants to burn and coin Nomin stablecoins without requiring capital to buy coins on the market.
Note: Havven is not the only project working on non-collateralized stablecoins. For beginners, it is also Haven.
Collateralization with a rotation
Although, at first glance, Havven's stablecoin system may seem complicated, once broken down into its components, it is quite simple.
Havven, as a guarantee for Nomins, obtains its value from the commissions generated in the network. This is because HAV holders receive dividends from network fees when they "block" their HAV in an intelligent contract. The stability of Nomin is based on this locked value, since HAV tokens are designed to overcollateralize the Nomins.
When a user of Haven puts his HAV into a smart warranty contract, a nusD, for example, is automatically coined for each HAV and is listed for sale on a decentralized exchange at $ 1.00. The user then receives the network tariffs while the HAV is blocked in the smart contract. To get back the HAV entrusted, the user has to regain the nUSD (also at $ 1.00), after which the nUSD is burned.
Havven uses an algorithm to adjust transaction fees and therefore net fee dividends to HAV holders, which incentivize (or not) HAV escrowing and, therefore, the Nomins coining.
As the Havven white paper explains, this pool of distributed guarantees aims to solve the problem of having to use collateral resources outside the blockchain:
"… if a system uses real-world assets or cryptoassets to support a stable token, if the collateral value is not related to the token request, then the system is vulnerable to external price shocks. change in the request of the token issued against him. "
Havven intends to maintain at least 80% of the over-collateralization of Nomins by HAV, although the network has maintained a much higher collateralization ratio since its launch at the time of writing (currently the collateralization is about 840% for all HAV and 350 percentage for HAV blocked).
So far, nUSD has maintained a fairly stable price, with only a couple of short raids from the $ 1.00 range since its launch in June 2018 – a short fall to $ 0.90 around July 24 and a jump to $ 1.08 on 1 November. cases, the network seems to have quickly corrected itself.
A Stablecoin multi-blockchain?
Even though his stablecoin has parallels with other projects, Havven's most notable aspect might be that it will soon be on more than one blockchain. HAV and Nomins will launch on the EOS blockchain by the end of 2018, while remaining on the Ethereum blockchain.
"Every blockchain needs a scalable and stable means of censorship-resistant exchange," said Havain founder Kain Warwick. ETHNews. "As EOS supports a growing number of dApps, we see the need to create a level of payments to improve usability for the entire EOS ecosystem."
Warwick said he chose EOS over other blockchain because of its rapidly growing developer community and its ability to support high volumes of fee-free transactions.
"There are big advantages in having Havven on more than one blockchain," he said, continuing:
"The blockchain agnosticism means that Havven's success is not related to the success of a blockchain, but we do not yet know which blockchain will still work in five or more years, and there's a good chance that the & rsquo; Blockchain exclusivity from the start leading to fragmentation throughout the ecosystem and diversifying Havven among the most promising blockchain will ensure that we are well positioned to provide decentralized stability for the future, whatever happens. "
Warwick said that Nomins will have the same name on both blockchains, but with the extra designation of nUSD-ETH and nUSD-EOS, for example. Havven plans to eliminate 50% of the new HAV-EOS tokens to existing HAV-ETH holders to ensure that people who supported Havven will soon have an important part of the EOS system, according to Warwick.
Havven will launch on EOS before the end of 2018, but has not excluded the launch on other blockchain in addition to Ethereum and EOS in the future.
Havven hopes that his method of combining the guarantee with the minting and burning of demand-based Nomin stablecoins will help offset some of the problems associated with the cryptocurrency assurance. Stablecoin is not already based on a central authority to burn or coin the tokens – or on external fiat money to support its value.
Obviously, if Havven can demonstrate long-term price stability with his stablecoin, his payment network could provide a real alternative to existing solutions. However, as with many stablecoin, more tests and long-term profitability need to be established, especially as Havven expands to more blockchain and multi-currency Nomine.
Trent lives in Ontario, Canada, on an offline farm where he spends his time writing, editing, enjoying nature and treating the land. With an education and background in journalism and a passion for the decentralization of global power structures, his writing has recently branched into topics related to blockchain and cryptocurrency. He also loves writing about ecology and agriculture, sustainability, gardening, botany, health and wellness, homesteading, survivalism and online marketing. Trent has a small amount of cryptocurrency, which currently includes Basic Attention Token (BAT), Swarm Fund (SWM), Stellar Lumens (XLM) and Polymath (POLY).
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