Crypto is possibly the best hedge against inflation
With reports across the globe coming out of high inflation, interest rates are set to rise accordingly to combat this and there has been a mass exodus across the stock and crypto markets as a reaction. While the sea of red is daunting, this economic downturn should be seen as an opportunity to purchase crypto at a discount, with certain types of crypto being better hedges against inflation for both retail and institutional investors.
One of the reasons so many are so bullish on crypto as a hedge is because many cryptocurrencies have a fixed supply. This means that the supply of ‘money’ in an ecosystem cannot be manipulated; contrarily, fiat money is inherently a depreciating asset as the supply can be and is manipulated by central governments. A fixed supply enables appreciation of one’s asset due to the laws of scarcity, therefore crypto is in theory a far superior asset to own compared to the US Dollar, British Pound, Euro, or any fiat currency that increases total supply and enlists quantitative easing.
In recent times we have seen the adoption of fixed supply assets such as Bitcoin (BTC) by countries and major cities, most notably El Salvador and Miami as they believe that they offer an opportunity to protect their financial sovereignty through an asset that’s vastly undervalued and anti-inflationary. While Bitcoin is the choice for many institutions, largely due to a lower market variance, retail users who have higher risk tolerances are seeking other fixed supply cryptocurrencies to hedge against inflation and protect their financial freedom.
The Unicorn project set for institutional and retail adoption
While some cryptos tend to lean more towards institutional adoption and others toward retail, there are very few projects that have the potential to realise both, and those that do are the tokens we see towards the top of the market cap charts.
Enter CashFi (CFI). CashFi is a project, currently in Presale, that looks to bridge the gap between retail and institutional adoption across multiple domains, as well as prioritising user sovereignty. The Proof of Stake, ERC-20 coin has recently laid out the product suite and services on offer through its whitepaper and commissioned a robust independent audit to validate the security.
CashFi is looking to create an ecosystem where they change the game across liquid staking, NFT marketplaces, and commodity trading through synthetic assets or CFI Synths. The versatility across both retail and institutional use is one of the main reasons why many investors are keeping tabs on CashFi and getting excited about the protocol as it enters Presale.
One feature that many crypto enthusiasts have been calling for is liquid staking. Liquid staking in essence allows you to maintain the freedom of moving your assets around while still helping validate the network through the staking process. CashFi will do this through the use of a derivative token which is pegged at a 1:1 ratio and will be distributed as an ERC-20 equivalent in the form of a synthetic asset. This token will be free to use and trade across networks, benefiting both users, by not encompassing the problem with regular staking in not having access to your funds, and the protocol, through network validations. Many believe that liquid staking is the way that all proof of stake currencies will embark on in the years to come and CashFi has an opportunity to lead the way.
NFT marketplaces are not new to the crypto ecosystem, but what CashFi is looking to do is uniquely empowering for developers and users alike. CashFi will enable unparalleled levels of operability for developers to tailor their NFT marketplace exactly how they envision it. Moreover, CashFi will allow for specific artist-specific marketplaces to exist and incorporate this across asset classes and networks.
The marketplace really does look like one of the best potential features that CashFi will develop and we expect many developers and projects to build using this service.
Integrating commodity trading into DeFi
Lastly, the planned commodity product suite on CashFi is set to revolutionise institutional use cases and adoption. Currently, the auditing process of commodity trading can be somewhat tricky, and liquidity problems can occur due to bottlenecks and supply chain issues. CFI Synths will help alleviate many of the auditing problems that can occur through safe storage of trading information on the blockchain, but also allow instant access to liquidity upon verification.
Retail users will also be able to benefit from the product suite and democratise the market due to lowering the barriers to entry. CashFi really can be the unicorn that bridges both retail and institutional users on one platform and looks set to be a strong investment option, particularly as a hedge against inflation.