Volt Protocol raised $2 million for its inflation-resistant project by pegging to an inflation index rather than a fiat currency, aiming to help DEFI users maintain their purchase power so let’s read more in today’s latest crypto news.
Volt Protocol uses Fuse which is an ETH-based open interest protocol that supports isolated interest rate markets. Every month, the target price of Volt updates shifts accoridng to changes in the inflation rate. 2022 saw a wave of venture capital money that poured into the blockcahin industry. Last week, NEAR announced it raised $350 million in new funding, and last month, Nova Labs raised $200 million.
Similar raises could be less noticeable but they are of extreme importance, Volt Protocol is looking to create a spark in the stablecoin industry with a $2 million seed round led by Framework Ventures and Nascent which is a team of DeFi builders and investors. Volt Protocol calls itself a decentralized and inflation-resistant stablecoin and tracks the consumer price index that was released by the US Bureau of Labor Statistics. What sets it apart is that it is not pegged to a fiat currency which sets it apart from current stablecoins like USDC and Tether. Framework Ventures co-founder Michael Anderson said:
“In an era of uncertain monetary policy and geopolitical events, we believe Volt is in a powerful position to make an impact across DeFi by streamlining new and easily accessible forms of wealth preservation.”
Volt is built on the ETH network and uses Fuse which is an ethereum-based open interest protocol that supports isolated interest rate markets. With these isolated markets, each lending market is kept separate from the other makers and any changes to the market could not affect the other markets in the Fuse ecosystem with the Volt Protocol saying that its mainnet will launch in late April or early May. Volt uses a chainlink oracle to transmit CPI data to the smart contracts as an automated program that executes once a specific criterion is met and the current annual inflation rate is stored. Every month, the target price of Volt updates as per the changes in the annual inflation rates.
Volt claim to be backed by a collateralized debt position which allows users to swap the collateral types at a fixed rate so those that want to obtain or sell VOLT will be able to do so via the PSM or other decentralzied exchanges:
“Volt is not algorithmic in the sense of some of these types of stablecoins that base their stability primarily on a hard-coded mathematical mechanism intended to regulate without any human input autonomously. I think they are very cool. But it can go wrong very easily.”
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