When you hear of ICO, you probably envisage investing in an offering reminiscent of Bitcoin which you hope that in a few months or years could make you rich or at least appreciate in value. That may not always be the case. This is why it is important to know that the ICO space, in its development, is morphing as different stakeholders come up with different ideas and concepts that they want to be funded.
The so-called stable coins is one of such concepts that industry watchers are still trying to figure out how it would work out and more especially what utility and benefits it has for investors. Why would anyone want to invest in a stable coin?
Stable coins are cryptocurrencies that are backed by fiat or any other tangible assets that bestow stability on them. They are practically valued or pegged at the value of the fiat or asset which backs it. This means that their value doesn’t go up or down. Though stable coins have been mooted, no one knows just how they are going to work, although it is certain to engage the interest of cryptocurrency enthusiasts whose interest is in stability than speculation.
It is a known fact that cryptocurrencies are volatile, the reason why they are considered high-risk investments. However, their volatility is one of the reasons they are attractive to investors. Every investor hopes the coins and tokens they invested in worth more in the future.
Though it is an untested forth, the concept of the stable coin is interesting and the ICO of Arc Reserve Coin is meant to generate fund to distribute such a token to investors. The ARC team said that their coin is regulated. That gets any observer wondering how possible that is since SEC has not openly admitted to registering and regulating stable coins since they don’t seem to have features of securities.
Though the Arc Reserve Currency team seem to have done their homework well, the coin market watchers are eagerly awaiting the reaction of the market to a non-speculative coin. Granted, ARC is going to have a fixed value, there still are a lot of cryptoeconomics involved in making that a reality and it would be interesting to see how that is accomplished. Another interesting thing about the crowdsale would be the reaction of investors to a token that has little or no store value.
The Arc Reserve Currency team though have insisted that the coin has intrinsic value. They maintained that the fund realized from the ICO shall be used to stabilize the token, even though the investors won’t be having any benefits in terms of value appreciation of the coin. This shows that this particular ICO is not an investment, unlike volatile cryptocurrencies.
No stable coin ICO has been known to be successful. This is why the confidence of the ARC team is bewildering. However, it will be interesting to see a stable token gain utility and acceptance in the coin market.