Coinbase Ventures, the corporate venture capital arm of crypto exchange Coinbase, has invested $1 million in a strategic funding round for Ampleforth Foundation’s decentralized low-volatility commodity money, SPOT.

Fragments, the development company behind the Ampleforth protocol, announced the news on Monday.

“SPOT is the culmination of five years of research and development by our team, and it fulfills our vision for using blockchain technologies to create a ‘better money’ rather than replicating dollars onchain,” Fragments CEO Evan Kuo said in a statement shared with The Block. “While the latter served the market’s immediate needs, some of the smartest people in the industry have begun to realize the significance of what we’ve been working to solve: inflation, durable value storage, and reliance on centralized intermediaries.” 

Currently available on Ethereum, the SPOT flatcoin is also set to launch on the Coinbase-incubated Layer 2 Network Base as part of the deal. New markets on the Base decentralized exchange Aerodrome Finance will go live on Monday.

Fiat-backed tokens like USDT and USDC dominate the $170 billion stablecoin market. Alternatively, flatcoin technologies like SPOT are designed to track the cost of living rather than be pegged to a fiat currency like stablecoins. 

The word “flatcoin” was likely coined by former Coinbase CTO Balaji Srinivasan in 2021, who noted that if a particular fiat currency devalues because of inflation, the stablecoins pegged to that fiat currency will also suffer the same fate. Flatcoins instead optimize for price “flatness” using an “onchain basket of goods,” according to Srinivasan’s definition. 

SPOT is designed to combine the characteristics of fiat money like the U.S. dollar and hard commodities such as gold or bitcoin to create a “fully decentralized” and “significantly less volatile” asset that can be used in the onchain economy, the team said. It does not aim to stay stable in the way that stablecoins do.

Alongside its “inflation-resistant” store of value protocol SPOT, Fragment also develops the unit of account protocol AMPL and DAO governance protocol FORTH -3.17% .

AMPL is a rebasing cryptocurrency with no specific asset backing, relying on an elastic supply mechanism to stabilize its price, typically ranging between $1 and $2. 

SPOT is a low-volatility derivative of AMPL, designed to move less dramatically in price. When AMPL's price changes significantly, SPOT's price adjusts slightly. SPOT is created by reorganizing AMPL's volatility into two perpetual derivative assets: SPOT, which is less volatile and designed as a safer asset to hold, and stAMPL, which is more volatile and designed to offer magnified exposure. This transparent process aims to produce decentralized, low-volatility commodity money rather than digitized dollars.

In a September 2023 interview with Yahoo Finance, Coinbase CEO Brian Armstrong called flatcoins “the next iteration of stablecoins.” Armstrong described the idea as “a better form of money in the crypto space” compared to currently available cryptocurrencies and stablecoins, adding that while Coinbase itself wasn’t working on flatcoin development, it was interested in it.

A month prior, Armstrong highlighted the concept of flatcoins among 10 ideas in crypto he was “most excited about,” hinting that the company’s venture investments might “go into things like that.” Other ideas that interest him include on-chain reputation, ads, capital formation, games, privacy for Layer 2 chains and tokenizing real-world assets.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。