Stablecoin is at the center of most of the DeFi universe. Having spent our entire lifetimes accustomed to a world of traditional fiat currencies, it makes sense that we would want to mimic that familiarity on the Blockchain. That may be why most DeFi pools rely on fiat-pegged stablecoins like Dai, Tether, and USDC as collateral. After all, who wouldn’t want an asset that combines the convenience and dynamism of the Blockchain with the stable value represented by the king of all fiat currencies, the US dollar? And stablecoins deliver exactly that — hell, they even have the word “stable” in their name!
But in this pandemic-stricken era of seemingly infinite money printing, how truly stable is the US dollar? In the face of dramatic unconstrained low interest rates and aggressive money printing from the Federal Reserve, the dreaded term “inflation” has crept into everyone’s minds. With that inflation comes runaway devaluation, a fact reflected in the higher prices of everything from gas to housing to restaurant meals to consumer electronics. Unfortunately, the tepid tapering efforts of the Fed and other central banks may not be enough to tame this inflation. And with dangerous new variants of the coronavirus popping up every few months to spook the markets, it seems unlikely these central banks will muster the willpower (political or otherwise) to truly rein in their money printing machines. It’s not hard to imagine that the compounding effect of a global recession layered on top of the stresses from the on-going pandemic is at the top of every central banker’s mind. At the same time, the only reasonable tools they have at their disposal will necessarily lead to even greater inflation, which in turn means stablecoins will be stably tracking an asset that may itself not be that stable.
Unlike stablecoins, a digital token tied to the value of real estate would be resistant to inflation. No matter how central banks and governments change their interest rates and policies, real estate retains the value derived from its clear utility as a space for living, working, or socializing. And unlike fiat-pegged stablecoins, these Blockchain-based real estate tokens hedge against inflation in the form of rental income, which increases as more and more fiat is minted.
The stable value and deflationary characteristic of real estate tokens such as those offered on the CitaDAO platform are both complementary and superior to stablecoins in an inflationary landscape. The use of real estate tokens in Decentralized Finance pools would give the DeFi community the option to hedge against inflation with a low volatility asset class on chain. As an added advantage over traditional stablecoins, these real estate tokens can be leveraged through composability with other DeFi projects to generate even better yields on the back of a stable asset class higher yields. Here at CitaDAO , we are offering our first digital real estate tokens through our process to Introducing Real Estate On-chain(IRO). By tokenizing assets that provide both inflation-resistant value and low volatility, CitaDAO is pushing the world of DeFi past stablecoins into new frontiers that will unlock new opportunities and possibilities for the DeFi community.
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CitaDAO.io is a Decentralized Finance (DeFi) platform for Real Estate to be tokenized on-chain, built on the Ethereum ecosystem. CitaDAO aims to solve the lack of liquidity, access limitation, and lack of composability in existing real estate ecosystem by creating interoperability with other DeFi applications/primitives that operate on the Ethereum protocol. Real estate token allows the community to diversify their portfolio on-chain to generate stable yield through real-world assets that have constant liquidity through AMM.
Disclaimer: The information contained in this communication is based on sources considered to be reliable, but not guaranteed, to be accurate or complete. This communication should not be relied upon or the basis for making any investment decision or be construed as a recommendation to engage in any transaction or be construed as a recommendation of any investment strategy