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Andy Watson
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ValuesDAO unveils its ambition to create a free-floating reserve currency for the digital space – minus the tomfoolery of the FED. Thanks to advancing DeFi technologies, the protocol aims to create a decentralized reserve currency called ‘VALUES’. Unlike many controversial projects that have promising ideas but lack any implementation, the ValuesDAO protocol is already live and it is developing quickly.
Digital Reserve Currency
The whole concept of ValuesDAO is built around the protocol’s native token – $VALUES. The price of the VALUES coin cannot fall lower than $1, making it similar to a stablecoin except for the fact that it can gain significantly in value, which creates additional earning opportunities just by holding it. Currently, the token is only backed by MAI, but in the near future, a basket of tokens will be added, including DAI, FRAX, USDC, etc.
ValuesDAO is challenging the Federal Reserve by introducing various economic incentives to manage the token’s supply and price. Unlike Fed money, the issue of $VALUES adheres to a strict set of rules and complex processes. Thus, the protocol’s developers can never ‘turn on the printing machine’, overwhelm the market with valueless VALUES tokens, and trigger enormous inflation. Here’s a simple explanation of how ValuesDAO fights against this unsound practice.
It all starts with the floor price for $VALUES, which is $1 as the token is or will be backed by several stablecoins (MAI, DAI, USDC). If the $VALUES price is in decline, the main protocol will initiate a token buy-back, thus removing them from the market and easing the pressure. The opposite is also true – if $VALUES soars in price, the protocol will sell some tokens from the Treasury and bring down the price to protect the whole ecosystem from extreme artificial growth.
The VALUES token can’t drop below $1 but it can grow a lot higher in value – but how? Because of the market premium and the ongoing issuance model. Today, $VALUES’ price can be described as 1 MAI plus the market premium. For now, the price will steadily increase. Although this all sounds simple, the protocol uses complex algorithms to retain the price, the details can be found in the project’s GitBook.
Incentives for the DAO
The protocol offers multiple ways to incentivize community members. There are at least 2 common DeFi-based ways to interact with $VALUES:
- Staking is the primary value accrual strategy and it is a good long-term investment option. Users remove $VALUES from the market, lock them via the smart contract and acquire ‘sValues’ as proof of their stake. The biggest benefit is not linear but the exponential growth of users’ assets. ValuesDAO provides stakers with high APYs that motivate them to prolong the staking period beyond 1 year. Thanks to the rebasing and the ValuesDAO Treasury, holders can increase their assets every 24 hours and expect even higher APYs down the road.
- Bonding is when a user gives their permission for the Treasury to issue new tokens by buying $VALUES directly from the protocol at a discounted price. In return, the user provides assets such as MAI, FRAX, DAI, USDC, etc. Bonding can be considered a secondary value accrual strategy that is ideal for short-term investors. This scenario can potentially be even more profitable than Staking, but it also requires more attention and a fast action response.
- In Stage 3, ValuesDAO will bring an amazing new product to the platform and defi market, called “NFT Reserving”. Look out for further details in the very near future.
After a series of hefty hacks, DeFi’s reputation has been harmed. Therefore ValuesDAO is putting additional emphasis on the security of users’ funds by providing a way for users to participate using their own blockchain wallets which excludes third-party interactions. This secure and intuitive solution provides the best-in-class user experience and full decentralization that’s comparable to industry leaders.
What Ensures the ValuesDAO Trustworthiness?
Introduced in late 2021, ValuesDAO stands out from ordinary DeFi startups with its unique features and the substantial progress it’s made:
- The protocol is already developed, well-tested and is running successfully.
- The algorithms for the ValuesDAO Treasury maintain the minimum floor price of $1.
- The stronger the Treasury, the higher the $VALUES floor price will be.
- Holders can expect a minimum of 200% APY, with a stablecoin-backed asset that will not drop below $1.
ValuesDAO is an algorithmic, economics machine that uses complex mechanisms to manage the $VALUES token supply in a way that is similar and yet not entirely like the Fed governs USD. Unlike the Fed, ValuesDAO does not sanction a chaotic issuance policy that brings devastating consequences. The decision mechanism is automated, fair and fully executed by the protocol.
Despite the fact that the governance is currently controlled by the core team, soon, the project will switch to a DAO-governed model. Being a relatively new player in the DeFi market may seem like a hard challenge, but ValuesDAO has managed to build an ever-growing community in a very short time.
Next Steps
ValuesDAO continues to attract more and more partners from all over the world and the project is getting closer to making certain crucial updates that will have a significant effect on the whole ecosystem. It’s worth paying serious attention to ValuesDAO as this rare and trustworthy DeFi project grows.
Feel free to follow ValuesDAO on social media and stay tuned for further updates.
Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.
