Sögur is bringing a new perspective to the way we look at money generally. It is solving a basic challenge that is overlooked by many economists and governments. The jist is, when you can’t deal with something, you leave it and map your way around it. Sögur is creating a monetary model that solves the current monetary crisis,
Money, today, stands at the core of the world’s economy. Recognized by all to be a medium of exchange and a store of value, it is the fuel to the world’s Governments as we know it. Not until Bitcoin, money is the sole creation of Governments. But is money (fiat) what it is meant to be?
I come from Nigeria. It is rumored that the richest man in the country now stands at 162nd (from the previous 104th) according to Forbes list because Naira, which he holds as money, devalued.
Money and its Expected Attributes
According to Investopedia, while explaining what money is, it was stated that one core attribute of money is that it is stable. This is one of the five tenets of money which are fungibility, durability, portability, being recognizable, and stability. The stability of money as a store of value is desired most. Everyone expects that $1 which he holds now should be the $1 in the next 5 years. Additionally, it is expected that all things being equal, what $1 could buy now should be close, if not equal, to what it should be capable of buying in the next 5 years. The Balance in a blog post about how the value of money is determined iterated that, demand is the key. But sadly, this is far from reality.
Money and History
According to Wikipedia’s records of the history of United States Dollars, it was stated the USD began as being backed by Gold (Gold standard). The advantage of this at the time was the USD can only be minted according to the Gold reserves (which was very limited) at the time. And as a result, the economy was quite stable. Things became interesting as USD dissociated from Gold in 1971. What happened was inflation and a continuous sharp rise in National debt. The fact remains that many nations today seem to print more monies to settle international debts and deal with demands. This in turn lowers its buying power and ultimately its value.
This kind of fiat system is what the current Stable coin frenzy in the DeFi ecosystem is built to mirror. The fear is that many who hold a stable coin today and leave it for another 5 to 10 years may come to realize that they have lost much over the years. That is just the reality. It might even be better to hold BTC instead.
Sögur is bringing a new perspective to the way we look at money generally. It is solving a basic challenge that is overlooked by many economists and governments. The jist is, when you can’t deal with something, you leave it and map your way around it. Sögur is creating a monetary model that solves the current monetary crisis, some of which have been identified earlier. Using blockchain technology as a foundation to end control and monopoly of power, Sögur is bringing in the concept of “stabilized”. This is instead of the concept of “stablecoin” as misunderstood by many and ultimately debunked by this article.
What makes Sögur different is the kind of innovative mechanism channeled at its system of operation.
Backed By Reserve- Sögur Reserves
Just like USD in its early days, Sögur is backed by reserves held in many fiat banks and funds held in crypto (verifiable here and here). The smart contracts and the reserves have been audited by third-parties.
Sögur’s monetary model states that as more and more SGR (Sögur) gets minted, the price increases, and the percentage of the token backed by reserve decreases. This is until a certain point where it is no more backed. It is expected that the token most have gained the needed liquidity to become a standalone currency.
The smart contract creates a buy and sell order which increases the price of SGR as more is minted and bought (demand increases). The value declines steadily (along a similar curve as it increases) when SGR is sold to the smart contract (demand decreases). SGRs sold to the smart contract are burnt. For compliance, selling, or buying from Sögur’s smart contract requires that the user pass KYC and AML procedures.
Decentralized and an Autonomous Organization
Aside from the fact that SGR is built on Ethereum blockchain which is by nature decentralized, the ecosystem of Sögur is governed by the community. The Sögur community votes or delegates leaders who determine or push proposals to be voted by the community. Essentially, the Community itself decides what the coin looks like. This is certainly unlike many stablecoin out there today. And unlike fiats, nobody can maliciously print/mint SGR unless there is a demand for it.
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