Basis, a year-old startup that’s building a price-stable cryptocurrency, just raised $133 million from top investors | TechCrunch

The three founders, who worked at D. E. Shaw and Google out of school, have their eye on three ways to get their cryptocurrency adopted. The developing world is one target market, given that many countries’ currencies are inflating at annual rates of 5 to 10 percent and sometimes more. (Bitcoin was intended to solve this issue but quickly came to be used as a store of value instead as its price continued to rise.)

They also see Basis as positioned well to take advantage of the large crowdfunding market. The reason: If an outfit is crowdfunding for more than a few days, the prices of many currencies can move, which isn’t ideal, particularly if those currencies happen to be dropping in price.

Not last, they imagine that cryptocurrency exchanges that are currently dealing with all kinds of pricing gyrations will embrace Basis. As investor Salil Deshpande of Bain Capital Ventures describes it in a new Medium post about the outfit, this last scenario alone is a huge opportunity, given that “regulatory, tax and legal issues make it onerous and costly for cryptotraders to trade with fiat, and many crypto exchanges do not even offer the ability to use fiat. A stable crypto store of value enables streamlined trading without incurring dry-powder volatility risk.”

How it all works isn’t crystal clear to us as of this writing, but when demand is rising, the system will create more of its currency, Basecoins, and when demand is falling, the company will reduce their supply to create an increase in price. We gather from its white paper that early investors benefit off this supply and demand movement.

Read complete article here:

Basis, a year-old startup that’s building a price-stable cryptocurrency, just raised $133 million from top investors | TechCrunch.