R1: Is this the rise of the user-oriented coin?
Cryptocurrency as any Google search will tell you is another word for decentralised currency and that’s the single biggest difference between it and fiat currency, but there are other differences, however, this is where the lines start to blur. Fiat currencies are, as we discussed, centralised in nature. They rely on a governing body of some description or other and are generally backed by some kind of reserve. If we take the $US dollar for example, this is backed by the US government’s gold reserves and this is in part what gives it its value. By definition then the US$ dollar is a fiat currency, but what about USD coin? USD coin is one of a handful of stable coins which like Fiat coins are backed by a reserve of some kind. In USD’s case, it is the US$ Dollar itself which gives the coin its value. Without getting too complicated this is pretty much how stable coins work. Sometimes they are backed by another currency and sometimes there’s another reserve behind the token like a stock or even an art collection. However, a new breed of coins is emerging which promise stability without the need for a financial reserve. These are the user-oriented coins and Recast1 is one of the flagship projects to watch.
“The whole idea of currency is a trip. Most folks don’t even want to know how it all works, but when you get down to it, it generally always comes down to trust. As long as we trust the institutions behind our money, everything is great. However, as recent events have shown us, generally a lot of that trust is misplaced. So, we turn to DeFi. With Defi, we’re all in the same boat and there’s no one out to rock it. Well, that’s the theory, but, where there’s money, there’s greed and where there’s greed, you’ll always find bad actors. So, we set out to create a coin which isn’t driven by greed. You’ll never hear anyone at Recast talking about 10X or shooting for the moon, our coin is designed to be stable, just that. Honest, transparent, and stable and who doesn’t want some of that?” Imran Tarıq, Recast1
Recast1 or R1 is not backed by reserves, nor is it pegged to another currency, instead R1 maintains its stability purely by algorithm. Unlike traditional cryptocurrencies which reward some users via either proof of stake or proof of work, R1 rewards all its users every time a transaction is made. Those with more coins will get more rewards, but everyone benefits and that’s the simple secret behind the token’s stability. R1 hopes this subtle shift in the way its token behaves is enough to keep it buoyant.
To prevent bad actors from trying to manipulate the coin, the developers have built in a number of failsafe to prevent the sort of chicanery we’ve seen in other markets. These measures include wallet limits and caps on transactions to protect against rug pulls, pump and dumps, and other whale games.
You can learn more about Recast now by reading their white paper or following them on social media.