1. What is a stablecoin?
A stablecoin is a digital currency that derives its value from an underlying asset or from a portfolio of underlying assets, or even from algorithmic mechanisms.
2. How do stablecoins differ from other digital currencies?
Unlike 'unbacked' digital currencies such as bitcoin, stablecoins follow the value of the underlying assets such as fiat currencies, metals, or other assets, often giving them a more stable value over time than 'unbacked' digital currencies.
3. Why are stablecoins important in the crypto market?
Stablecoins offer a stable trading option in the volatile crypto market. They act as a 'parking' spot for crypto traders, allowing them to temporarily hold value without the usual crypto fluctuations and without leaving the crypto market environment. This is especially useful since only a few cryptocurrencies can be directly traded with fiat currencies, and such trades can be slow and complex.
4. What are the challenges with current stablecoins?
- Fiat-backed stablecoins (e.g., USDT, USDC, BUSD) often lack transparency about their reserves, may be exposed to financial market risks, and generally to inflationary pressures characterizing fiat currencies.
- Crypto-backed stablecoins (e.g., DAI, MIM) can be volatile due to the nature of their reserves.
- Algorithmic stablecoins (e.g., UST) rely heavily on user confidence and can pose significant risks.
- Metals-backed stablecoins usually depend on a single metal's price, exposing users to its volatility.
- All fiat-based stablecoins require the initial purchasers to provide and deposit the fiat-backing asset
5. What is Edelcoin?
Edelcoin is a unique stablecoin backed by a diverse mix of precious and base metals.
6. How does Edelcoin stand out from other stablecoins?
Edelcoin is anchored to a variety of precious and industrial metals, excluding gold, silver, and palladium, which are not currently marketable except in physical form. This structure avoids inflation tied to fiat currencies. Edelcoin's reserve is transparent, pre-exists the issuance of Edelcoin, is not invested, and backs each Edelcoin by a factor of 125%. It provides its purchasers with exposure to, and ownership of, the underlying metals.
7. How are Edelcoin and its underlying metals connected?
Owning Edelcoins means you own the metals backing them.
8. Which metals support Edelcoin's value?
Edelcoin is backed by a portfolio of metals including Copper Isotope, Cesium-133, and two types of Nickel Wire.
9. What benefits do Edelcoin holders receive?
Holders own the metal reserves in correspondence to the value of the acquired Edelcoins, can transfer or sell Edelcoins on approved exchanges, and have the right to redeem the metals corresponding to the purchased Edelcoins. Redemption terms apply.
10. Is Edelcoin's value stable?
Edelcoin's value is tied to the value of its metal reserves. Historically, these metals have shown low volatility compared to fiat currencies
11. Is Edelcoin suitable for crypto trading?
Given the stability of its value, Edelcoin is well-suited for trading crypto assets on the blockchain.
12. What if I keep Edelcoin for a long time?
The metals backing Edelcoin are base metals in use in modern, developing, industrial processes. In a likely environment of low volatility, the value of Edelcoin will tend to reflect the market demand for such metals.
13. How is Edelcoin created?
Edelcoins are minted following the tokenization of existing metal reserves. Edelcoin AG subjects metal owners wishing to tokenize these metals to the rigorous KYC and AML checks prevailing in Switzerland.
14. What's Edelcoin's symbol on exchanges?
15. What roles does Edelcoin play?
Edelcoin serves as both a means of payment and a store of value.
16. How is Edelcoin's value set?
Edelcoin's value mirrors the USD value of its metal basket, determined by reputable institutions. This value is set at the start of each token sale and updated daily.
17. Who introduces Edelcoins to the secondary market?
The owners of Edelcoins resulting from the primary market transaction (or tokenization) would typically list Edelcoins in crypto exchanges – fueling the secondary market.
18. How are funds from Edelcoin sales used?
Metals owners that engage with Edelcoin AG in tokenization (primary market transaction) would typically invest the proceeds of their secondary market transactions in eco-friendly metals mining processes and global charitable projects. Edelcoin AG also reinvests profits from metal tokenization similarly.
19. Do coin holders benefit from these investments?
No, coin holders don't share in, and are totally unrelated to, the profits or losses from these investments. They only own the metal reserves, which are always there to back up the Edelcoin as long as no redemption for metals occurs. Redemption terms apply.
20. Where is Edelcoin created?
Edelcoin is minted in Switzerland by Edelcoin AG.
21. Is Edelcoin compliant with regulations?
Yes, Edelcoin AG is fully compliant with Swiss legislation. Edelcoin AG is a member of the FINMA-recognised Self Regulatory Organisation “VQF” for ensuring compliance to AML and CTF legislation.
22. Are there risks in buying Edelcoin?
Yes, like all purchases, buying Edelcoin bears risks. These include potential digital infrastructure disruptions, political/regulatory changes, illicit third-party actions, loss of access to digital wallets, depreciation of the backing assets, and risks related to crypto exchange listings.