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Carbon: Accessible, Stable Money | Hedera18

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YouTube Video
https://youtu.be/awTX6tau1cw

Speaker
Sam Trautwein | Co-Founder & CEO | Carbon

Abstract
In developing markets, many people do not have access to a stable currency or even a bank account, but they may have mobile devices with internet connection. Carbon aims to facilitate a more inclusive and efficient global economy by launching reliable, price-stable cryptocurrencies that leverage Hedera Hashgraph’s high throughput and security.

CarbonUSD is a compliant, price-stable cryptocurrency that is one-to-one backed with USD. Starting off with full fiat-collateralization is essential for bootstrapping the market's trust in a stablecoin without depending on the size of an initial reserve. The team has developed a novel mechanism for transitioning to a hybrid fiat-algorithmic stablecoin model once CarbonUSD reaches sufficient scale as a fully fiat-backed token.

By deploying the algorithmic stablecoin on Hedera Hashgraph with Ethereum interoperability, CarbonUSD users will be able to tap into an advanced payments networks where transactions are borderless, have minimal fees, and are settled within seconds. Additionally, CarbonUSD serves as a gateway into the distributed ledger economy where users can trade and hedge against tokenized assets or interact with smart contract applications.

Most societies need stable, sound money to function effectively. CarbonUSD is an accessible alternative for developing economies, where adoption may catalyze the convergence towards a more inclusive and efficient global economy.

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Carbon: Accessible, Stable Money | Hedera18

  1. 1. Accessible, Stable Money for the Future Distributed Economy
  2. 2. Accessible, Stable Money for the Future Distributed Economy
  3. 3. | Mission Carbon will facilitate a more inclusive and efficient global economy through its reliable, price-stable cryptocurrency. Society needs a stable, sound money to function effectively. In developing economies, many people do not have access to a stable currency or even a bank account, but they may have mobile devices with internet connection
  4. 4. | Founding Team Sam Trautwein, Chief Executive Officer // Sam was on the founding CS team of Plenty, a Softbank-backed AI hydroponics company. Sam studied Computer Science with a concentration in AI at Stanford University, focusing on encryption and distributed systems. Gavin Mai, Chief Product Officer // Gavin worked on Uber's Global Marketplace Forecasting team and SalesforceIQ's Einstein Intelligence initiative. He also started the Hedera Hashgraph Bay Area meetup. Gavin studied Symbolic Systems at Stanford University. Miles Albert, Chief Strategy Officer // Miles was a founding team member and seed investor at Hedera Hashgraph, a next-generation distributed ledger technology platform. He has evangelized smart contract protocols since Ethereum's launch in 2015. Miles studied at the University of Southern California. Connor Lin, Chief Operating Officer // Connor worked at ConsenSys and Riley. Connor studied Humanities and Psychology at Columbia University.
  5. 5. | Core Team David Segura, Chief Marketing Officer // David previously served as the Founder & CEO of Giant Media, a pioneering Native Video Advertising exchange that included Bank of America, AMEX, and Dollar Shave Club as clients. Giant Media was successfully acquired in 2014 by Adknowledge, an AdTech platform funded by TPG, JMI, and Nokia. David is also an active Angel Investor in 40+ startups including Basis, TrustToken, Everipedia, Origin Protocol, and many others. He is a graduate of the University of Chicago. Nick Pai, Software Engineer // Nick began his career as a corporate credit arb trader at Barclays and architected their infrastructure to execute creation and redemption trades of bond portfolios. Before Barclays, Nick graduated from Princeton University with a B.S.E. in Computer Science and researched applications of deep neural nets. His expertise lies in smart contract architecture and product design. Andrea Gildea, Corporate Counsel // Andrea is the Head of Legal, Americas at Transferwise. Her extensive experience with money transmitter licenses and fintech law is instrumental in helping us interface effectively with law firms. She previously worked at CLS Group and Covington & Burling. She is a graduate of Brooklyn College Law School.
  6. 6. Why a Stablecoin?
  7. 7. | Bitcoin & Cryptocurrencies Are Too Volatile Cryptocurrency growth will continue to accelerate because it offers a digital, trustless, and decentralized system for storing and transmitting value. But, who wants to get paid or settle debts in Bitcoin?
  8. 8. | Hyperinflationary Currencies Today Three-year cumulative inflation rate (2016) Source: CAQ International Practices Task Force 2017
  9. 9. | The Unbanked Population Today Globally, approximately 1.7Badults remain unbanked 62% of adults worldwide have an account at a financial institution or through a mobile device, up from 51% in 2011. 94% of adults in OECD high income countries said they had a bank account in 2014, while only 54% of those in developing countries did Source: World Bank Global Findex Database 2017
  10. 10. | Mobile is helping counter physical barriers Source: World Bank Global Findex Database 2017
  11. 11. | Stablecoins Provide Stability On A Massive Scale A bank for the rest: Globally, ~1.7 billion adults remain unbanked Financial services: With fiat on-off ramps and intimate knowledge of our customers’ financials, we are well-poised to dominate financial services Everyone’s safe room: Anyone, anywhere can hedge An economy of us: Arbitrary complexity in the payments space Economic interoperability: Free flow of capital from any x to any y
  12. 12. | Stablecoins Have Clear Use Cases Exchanges and Crypto Traders: A frictionless fiat on-and-off ramp for exchanges, and a trusted hedging asset for traders. Low-friction Payments: Send CarbonUSD across borders, around the world, with low fees and fast settlement. Stable Money in Developing Economies: Accessible, stable money for people who are unbanked or experiencing high levels of inflation. Smart Contract Integration: Compatibility with the future of financial contracts, powered by blockchain technology.
  13. 13. | Stablecoins Need to be Re-thought Early stablecoin projects have shown promise, but fall short of expectations Most future projects have flaws in their design or incentive structure
  14. 14. | Stablecoin Solution: A Hybrid Approach to Price-Stability To address the tradeoff in bootstrapping and maintaining trust, we have developed a new, hybrid fiat-algorithmic approach to price-stability. In its early days, CarbonUSD is a compliant, price-stable cryptocurrency that is one-to-one backed with USD. Unlike purely fiat-backed stablecoins, CarbonUSD’s novel “meta-token” structure enables a seamless future transition to an algorithmic stablecoin model once it reaches sufficient scale as a fully fiat-backed token.
  15. 15. | Why Hybrid? Because Bootstrapping Trust is Hard Off-chain (e.g. fiat-backed, crypto-backed) stablecoins are effective at bootstrapping trust, but not at maintaining it at scale. At scale, they are subject to regulatory, market, or governance issues. While fiat backed is by far the soundest approach it’s likely that many of these groups will outscale their compliance in the same way Tether has. On-chain (e.g. algorithmic) stablecoins are theoretically effective at maintaining trust at scale, but not at bootstrapping it. They depend on high exchange liquidity to achieve price-stability and resilience against a wide range of attacks, since they are not otherwise redeemable for fiat dollars.
  16. 16. | Meta-Token: Key Innovation for the Hybrid Model Why: The meta-token smart contract is a key innovation that enables CarbonUSD to eventually transition off from full fiat-collateralization without disrupting its liquidity network effects on exchanges and while maintaining the highest standards for regulatory compliance. How: CarbonUSD, or CUSD, will be composed of a basket of whitelisted tokens. A token that is “whitelisted” may be used to create new CarbonUSD, serving as its collateral. Initially, only one token will be whitelisted, a stablecoin that is 1-to-1 backed with U.S. Dollars in a trust account.
  17. 17. | Governance and Delayed Upgradeability Any update the Carbon team makes to the whitelist, which may initialize the transition to a hybrid fiat-algorithmic model, will have a predetermined delay (i.e. two weeks) before the change can be implemented. The delay, programmed into the update smart contract, serves to give users sufficient time to react and withdraw their funds if they do not feel comfortable with the pending update. Eventually, we intend to use the same system to update the governance structure itself, evolving alongside the Carbon network towards greater decentralization and transparency.
  18. 18. | Why Hedera? Algorithmic stablecoins are only viable in a high throughput world. The Hedera Hashgraph public distributed ledger platform is: Fair No auction frontrunning Fast High throughput Secure Asynchronous Byzantine Fault Tolerance Governed Consortium minimizes risk
  19. 19. What’s Next?
  20. 20. | Carbon: The Language of Value Rather than using a set of rules for all transactions, rules can be made dynamically by communities.
  21. 21. | Going Global We envision a future where anyone anywhere can securely, cheaply, and quickly transfer value to anyone.
  22. 22. | Future Global and interoperable value Decentralized derivatives and debt/credit Decentralized liquidity Post-dollar world
  23. 23. | Carbon Ambassador Program Inspired by Hedera’s pioneering ambassador program, and given that we’ve already have had Hedera ambassadors in developing countries reach out to us about evangelizing Carbon, we are excited to announce the Carbon Ambassador Program. Please reach out to team@carbon.money if you are interested.

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