The Saga Foundation, a non-profit organisation based in Switzerland, is planning to launch a new cryptocurrency in the last quarter of 2018, according to the Financial Times. The project is notable because of the qualifications of its founders.
The advisory board of Saga consists of names such as Jacob A. Frenkel (Chairman of JPMorgan Chase and former governor of the Bank of Israel), Myron Scholes (Nobel Laureate in Economic Sciences), and Leo Melamed (founder of the National Futures Association and Chairman Emeritus of the CME). The team also includes a co-founder of Bancor, a co-founder of Sirin Labs, professors from Cornell University and the Hebrew University of Jerusalem, and a consultant to the IMF.
The currency, SGA, is to be asset-based, with its value tied to a “variable reserve of conventional currencies, hosted by reputable banks”. This reserve will include funds used to buy SGA tokens. According to the website, the purpose of the reserve “is to ensure participants can sell SGA; the contract will always offer to buy SGA, drawing on funds from the reserve.”
Participants can buy the tokens with ETH or fiat currencies.
The selling point really is that the price of the coin will be relatively stable. The official website says that ehile it will fluctuate with the market to a certain extent, the reserve will act as a buffer, leading to price movement being “moderated by the interplay between the money supply and the reserve”.
The SGA supply will be altered according to the smart contract – when the economy expands, more SGA tokens will be released, and vice versa. The aim of this is to prevent rampant de- and inflation.
The project recognises that the value of the coin is only partly based on the reserve: “While stability is prized, the limitation is clear: in a fully backed currency there can be no price appreciation.” The currency will still rely on the “inherent value” of market trust as all currencies do.
There will be an inverse relationship between the reserve and the inherent value; the more value the coin has, the less the reserve will be needed. The reserve is intended to act as a stabiliser during the early stages of the currency’s development. As the website explains: “When the economy is small－and the inherent value is especially volatile － Saga applies a high reserve ratio, supporting stability.”
Saga does not intend to allow anonymity amongst with the coin, requiring owners to register their identities and pass anti-money laundering checks. According to the Financial Times, “it will allow national authorities to check the identity of a Saga holder when required.”
The foundation has already raised 30 million USD from investors, and intends to increase its staff from 25 to 70 this year, according to the FT. Founder and president of Saga, Ido Sadeh Man, said: “We didn’t want to do an ICO. It didn’t look reasonable to start a low-speculation and low-volatility vehicle by launching a high-speculation and high-volatility process.”
“We are not aiming for Saga to replace any national fiat currencies, but to be a complementary global currency,” he said. “We are targeting people who are holding digital currencies and looking for safe harbours from the raging volatility.”
Source: Read Full Article