You know what they say, there’s always money in crypto.
Case in point: Basis, a cryptocurrency startup out of New Jersey, started by co-founder and CEO Nader Al-Naji and 2 other recent Princeton grads, announced a $133m round of funding from massive firms including Bain Capital, GV, Lightspeed, and Andreessen Horowitz.
Their goal? To chase the ‘holy grail’ of crypto — stability.
Creating the elusive ‘stablecoin’
The value of popular tokens like bitcoin and ethereum fluctuates wildly from day-to-day, but according to a Basis spokesperson, “a currency needs to be stable in order for people to really use it.”
Al-Naji tells us that, unlike bitcoin, which relies on a fixed supply of coins that are mined, the supply of basecoin is “determined algorithmically,” via open source software and regulated via a “monetary policy on the blockchain.”
The idea is to keep the value of one basecoin as close to $1 as possible, by issuing additional Basecoin when prices spike, and “Base Bonds” and “Base Shares” in a dip.
Will this actually work?
As critics of proposed “stablecoins” have noted, systems like Basis’ require a huge amount of initial capital to build a sustainable ecosystem of users — but, it looks like they’ve already solved that part of the puzzle.
We still don’t know when the first Basecoin will be released — when asked about timelines, Al-Naji said, “I wouldn’t think in terms of time, I think it’s better to think in terms of milestones […] It’s hard to say exactly how much time this will take.”
In other words… probably not tomorrow.
Note: This post has been updated to include quotes and additional context from Nader Al-Najit.