What Is e-Money (NGM) And How Does It Work? | KuCoin Crypto Gem Observer

2021/06/28 09:47:33

These days, a lot of people see blockchain technology as the answer to serving under-banked populations. With no access to traditional banking systems, the cryptocurrency world makes for an ideal alternative, as it is cheaper and generally more democratic.

For e-Money, stablecoins seemed to be the ideal stepping stone for these communities into the world of digital assets. That is why it has created an ecosystem around these currency-backed stablecoins.

What is e-Money?

Built on Cosmos, e-Money is a blockchain-based payment platform that is committed to bringing about financial inclusion and helping people around the world to have easy access to digital currencies.

Its vision is to provide a level playing field that allows for equal access to transparent financial services. It is looking to achieve this on a global scale, reducing costs along the way. e-Money is doing this by building cross-blockchain compatible next generation stablecoins for the Internet of money

How Does e-Money Work?

e-Money’s range of currency-backed stablecoins were created to be a store of value, though it is thought of as the layer two solution for traditional finance, rather than a replacement.

e-Money stablecoins are fully collateralized, being backed by collateral in the form of deposits held at commercial banks. They currently support several European stablecoins such as the eEUR, eCHF, eSEK, eNOK and eDKK.

What makes these stablecoins stand out is the fact that they are interest-bearing. Each stablecoin uses a dynamic peg that tracks the underlying interest rate, acting more like a bank deposit than cash-in-hand.

Tendermint, on which Cosmos is built, is ideal for the e-Money payment system as it is scalable, provides immediate finality, and can be configured for immediate block creation. The e-Money sovereign zone on Cosmos is designed to be easy to use, fast, and with incredibly low, negligible fees.

Who Created e-Money?

e-Money was founded by a Danish duo: Martin Dyring-Andersen and Henrik Aasted Sørensen.

Martin Dyring-Andersen brought his entrepreneurial spirit to help create the project, with a particular interest in new technologies and applying them to infrastructures. He is backed by over 20 years of experience within startups, algorithmic trading and FX markets.

Henrik Aasted Sørensen brings a technical background to the project, helping shape the software powering e-Money. He has over 15 years of experience with software engineering, with roles within financial infrastructures, security and consulting.

What is the NGM Token and What is it Used For?

NGM, known as the Next Generation of Money, is the so-called staking token of the e-Money project.

There are a few different uses for the NGM token. Firstly, it is used for staking. The purpose of this is to secure the e-Money network by bonding it with one or more validators.

The second purpose of NGM is for rewards. Each year, the supply of NGM is inflated by 10%. This then gets distributed as staking rewards to users who bonded tokens, with those staking more getting a bigger share of the rewards.

Transaction fees can be paid with NGM, which is also shared out as rewards. Essentially, all stakeholders in the company rely on NGM, and so their interests are all aligned.

Closing Thoughts

The crypto market will always be in need of stablecoins. In its whitepaper, it outlines a range of use cases that all stem from its main vision to promote financial inclusion. The project is making strides in developing something not just global, but relevant for the target market. This is key for driving mass adoption.

Behind the scenes, the intuitive staking model ensures that all parties are on the same track and incentivizes people to get involved. All in all, e-Money looks to have a unique perspective in how stablecoins can be used, offering much needed remittance services, amongst other things, that are made ‘fast and frictionless’ using blockchain.

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