Anchor – Will The New Stablecoin Be an Ultimate Solution to Preserving Monetary Value?
While today’s global economic ecosystem is plagued by instability, market volatility and inflation, various financial institutions are coming up a with a solution generally known as stablecoins. Stablecoins are cryptocurrencies designed to minimize the volatility of the price, relative to some “stable” asset or basket of assets. A stablecoin can be pegged to a currency, or to exchange traded commodities, such as precious metals or industrial metals.
2018 is often called the year of stablecoins, with a plethora of projects launching their own versions of stablecoins. Some of them are already trading on exchanges, while others are yet to come to the market. One of those is Anchor, a new cryptocurrency introducing a stable peg of value for the first time on the global crypto market.
Designed by Anchor AG, a Switzerland-based financial services holding company, Anchor is modeled as a two-token system consisting of the Anchor Coin, the system’s currency and payment token, and the Dock Token, the systems utility token that is used to insure system stability.
According to the project’s website, “Anchor goes a step further than other cryptos, and proposes a solution for the systemic issue of instability in the financial markets in general.” The team behind the project claims to have devised “an innovative and universal monetary value measurement standard, in the form of a proprietary mathematical algorithm – the Monetary Measurement Unit (MMU).”
As explained by Daniel Popa, the project’s founder and CEO, “Anchor is aimed to be stable currency per se, but it’s more than a stable currency.”
“The Anchor is designed to be an index, a measurement unit for currencies. So what we have created is a scientific measurement unit, an index, that is based on the global economy of over 190 countries, and this index is a very stable index, that holds value over many, many years,” said Daniel Popa.
ForkLog spoke to Daniel Popa at the recent Blockchain Economy Istanbul Summit, asking him to explain Anchor’s unique features.
ForkLog: So you are saying that this index is stable from the economic point of view?
Daniel Popa: It is stable from a global economic standpoint. We call it the MMU, the monetary measurement unit, and this monetary measurement unit measures the pulse of the world, it measures the value of the world. We peg the Anchor to this monetary measurement unit, and in a way the value of the Anchor at all times is going to show the value of the global trade.
So this is not just a stablecoin. You know, we went in there, and we flipped the coin here, and said the value is gonna be this. Actually, the value of the Anchor represents the global value of economy at that moment. So we can even go back and look through our algorithm, where would the Anchor be, if it was here starting with a 25 years ago.
If you look at the value of the US dollar starting with 1994, the Anchor would have been still holding the value when the US dollar dropped 55.2% of its value. This shows how huge this is, and 55% of the value of the US dollar – that means the value is less than half what it was 24 years ago.
So to put it in a perspective, this means that if you purchased a house 24 years ago with a hundred thousand dollars, that house now is over two hundred thousand dollars now. So people look at the price and they say: look, my house gained in value! No, it did not. It’s the dollar that lost value, not the house gained.
ForkLog: With so many stable coins appearing in recent months, what’s your unique proposition? What’s your target audience?
Danial Popa: Very good point. I think it’s a very good thing that stablecoins are coming to the table. We’ve been working on this project for almost a year now, since March last year. So it was in the year of the stablecoins, but we saw where the trend will be going, and we had this vision.
The Anchor is not just a stablecoin, the Anchor is a monetary measurement unit, where many coins will peg themselves to the Anchor. We are here to preserve value, we are here to give investors and traders a possibility to hold their value within the Anchor.
Traders will look at the Anchor and say: we want to peg ourselves to the Anchor.
Majority of stablecoins that are on the market today, they peg themselves to the euro, to the gold, to the US dollar. Now, if you want to preserve value, but you peg yourself to the US dollar and you see it drops value every single year, your value will be here too in 24 years.
So what we propose is an index, which is a micro-economical formula built by PhDs in finance. That index is not only stable, but we can predict where it’s going to be in five years, ten years from now – it’s a predictable index. And because it’s based on the global trade, we can look in the last 25-30 years and we can see that the global trade has an average growth year after year. The global trade is in constant growth, if you do an average. Now yes, it may have declines, like it was in 2008, but as an average global trade is on a growth.
ForkLog: From an investor’s perspective, if I buy a certain amount of tokens, and then in a couple of months or a year I want to cash it out, is it backed by any real assets I can exchange it to? I mean, right now I need hard cash. What, apart from the index, you are going to offer investors?
Daniel Popa: Pretty much. The Anchor is utilizing the blockchain technology, like any other coin would. So there’s no difference in how you enter or access to the Anchor. There’s no difference on how you would enter and exit any other currency. So, there’s many ways to skin a cat, as they say, and we’re going to be on exchanges, so you can go from Anchor into any other type of crypto, you will be able to exit cash from it, you will be able to do whatever you do with any other currency.
ForkLog: What exchanges can we expect to list Anchor?
Daniel Popa: We are definitely starting to talk to exchanges, and we have already been offered partnerships. We still have time, because after we are launched, our pre-sell is gonna take a couple of months before we need to be on an exchange, so we’re talking about June-July to be on exchanges. Some of the exchanges we talked to, they really believe that what we have created is not just a coin, but rather a scientific masterpiece.
— The Anchor.io (@theanchor_io) March 4, 2019
ForkLog: From what we saw, you have very specific model which actually involves two tokens. Can you detail more a little bit on this, why you need the second coin?
Daniel Popa: The Anchor itself, it’s based on the global trade. So it has a value on its own. But what happens is and what we looked at, we said: what about if the market comes in and chooses all kind of things that we won’t be able to predict right? How about if it becomes volatile because of demand, or lack of demand?
So what we created on top of the Anchor, on top of the MMU, are six pillars that hold a safety net to make sure that the Anchor is always pegged to the value of the MMU.
So, the two-token actually is the last of the pillars that holds; there are five pillars in front of that, that hold this huge and stable currency. And what it does, the second pillar, the utility token, is a very ingenious way of making sure that the Anchor always stays pegged to the real unit of the MMU. The way it works is, if there’s too many tokens out there, too many anchors and the price starts to drop, what we do is we ask our investors or holders to move it into the utility token, into the Dock.
We have a kind of a boat there in the ocean, and it’s anchored to the floor. The markets are usually a choppy waters, where you need an anchor to anchor your holdings. And all the tokens, all valuables and fiat currencies – they have their own waves and their choppy waters. So, the anchor is anchored there to the floor in those choppy waters. But what happens, and we know this from history – every so often there’s a huge hurricane coming.
What do people do when there’s a hurricane coming? They’re taking their boats and they’re putting them in a dock for safe harbor. So pretty much that’s the analogy. In other way, what we do – we ask people to move part of the anchors into the dock, and the system tells us exactly how many. And once the number is met, it stops. After that we eliminate (burn) the anchors from the market, and now the peg is kept to the real MMU. And when the demand comes back – now we can ask the investors or holders to move it back from the utility token into the anchor. They move it and also make a small profit along the way.
Forklog: How exactly are you doing this? How do you encourage people to do this?
Daniel Popa: Yes, we do incentivize users to move into the Docks when needed. But we don’t need everybody to move, it’s just a small portion of the Anchorage that has to be burnt.
ForkLog: Are you using your own blockchain or build upon already existing platform?
Daniel Popa: We will use ERC-20 and Stellar, we are going to be on both to start with, and later on we will decide which one we will adopt fully, or will we write our own code.
ForkLog: This is what many projects did in the past, they started on the ERC-20, then they moved to their own ledgers or other platforms.
Daniel Popa: That’s the idea. We will know within six months which direction we will go, but for right now we will definitely try both. And right now we are pretty much integrated and ready to flip, if we had to do it tomorrow. We have our MVP done, we have our tokens, we have everything ready.
ForkLog: What else do you have in place today?
Daniel Popa: We are pretty advanced. We’ve been working on a project for almost a year now, we have an MVP already, we have the monetary measurement unit, we have a clear launch date, and right now we are at the stage where we are just promoting ourselves, we are showing people and investors what we were about to bring sometimes in the month of April to the market, and what the Anchor can do for them and their holdings.
ForkLog: Going deeper into this, what is your actual business model? Where is your financial interest?
Daniel Popa: We’re getting ready to do a pre-sale, and in April we’re pretty much seeking private investors, that we would pre-sale to at a discount. And because the Anchor is a stable currency, you know, you can’t really ride the waves of the volatility – so it’s a pretty much one-time chance for an investor to come in, to help us launch the project, and they receive a large discount for doing that.
ForkLog: Will it all be aimed at accredited investors only?
Daniel Popa: Yes.
ForkLog: Will Anchor be open to the US market?
Daniel Popa: Yes, we are a Swiss company, and because we are doing a private placement and we are not having anything to do with the US, by law we can allow accredited US ambassadors to be part of the project.
ForkLog: Your token is not a security token then? If that’s the case, it doesn’t fall under the SEC jurisdiction, right?
Daniel Popa: No, it shouldn’t. But to be even more sure, right now we filed a request with FINMA, and we are waiting for a letter of non concern, which is pretty much about saying: yes, this is a utility token and not a security token.
ForkLog: When Anchor is expected to be fully launched?
Daniel Popa: We are making the last details as we speak. We plan on launching in April, we have two dates for April, that we will announce soon, but we have not yet determined the exact date. But it’s gonna be in April.
ForkLog: Will you tell more about your team?
Daniel Popa: It’s a global team. We have a team in Switzerland, we have a team in Bulgaria, we also have people in Ukraine, Moldova, Romania, United States, and Canada, so we are pretty international. We are not a big team, just 32 people, but this is pretty decent for just working and starting this thing.
ForkLog: What do you think about JPMorgan launching their own coin? They call it a stablecoin as well.
Daniel Popa: Like I have already mentioned, I truly believe in stablecoins. The more people will come in, and more companies like JPMorgan or Facebook who are working on a stablecoin themselves, the better it is. I think it’s a great thing that they’re doing that, it literally shows the world that whatever happened until now is wrong. And you know, if companies like that are coming into this game, that means whatever the cryptopeople and the blockchain did, it’s a great thing. So I think it’s wonderful.
Daniel Popa was interviewed by Andrew Asmakov
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