Basis scoops up $133m in private funding for its stable coin concept.
A start-up by the name of Intangible Labs is reported to have garnered $133m in private investment in support of its plan to create a new cryptocurrency called Basis. Run by three Princeton University graduates, Intangible – as reported by Reuters – plans for Basis to hold a stable value over time by controlling its supply; with the hope that this stability will increase its usability as a method of payment. In terms of its philosophy, it is a similar prospect to a Europe-based proposal, Saga, which we reported on recently – though that intended to induce stability by tying itself to a fractional reserve of fiat currency. That coin, despite being backed by a foundation including some of the region’s top economists, ‘only’ attracted $30m in funding – which puts the figure Basis achieved into some perspective.
Basis’ token is being built on the Ethereum blockchain, with its own automated mechanism to controls supply and keep the price stable. Al-Naji first floated the idea late last year – before beginning the Basis project, that was initially known as ‘Basecoin’ – after first musing on the topic via his informative blog. In a section called ‘Bitcoin’s problems and the innovations that solved them’, Nader posited that Bitcoin’s fixed supply resulted in “changes in demand [that] result in wild swings in the prices of everyday goods, and this churn ultimately results in extreme losses in overall economic productivity,” before stating that “Most modern economists believe that you can prevent such spirals, and therefore ‘optimise’ the amount of economic activity by manipulating the money supply.”
Which is exactly what Basis plans to do – despite, it would seem, such control over the supply of a cryptocurrency causing perception problems for companies like Ripple, and attracting ire from certain quarters of the cryptocurrency community that instinctively shuns such interventionist policies.
Google’s venture investment arm, GV, is among those pumping cash into Intangible’s coffers, alongside some other big venture capital players, hedge fund manager Stan Druckenmiller, and former Federal Reserve Governor Kevin Warsh.
“Volatility of cryptocurrencies has prevented their widespread adoption,” Basis’ co-founder, Nader Al-Naji said. “We are trying to build cryptocurrencies that have all the benefits of crypto but is stable.”
Al-Naji is joined in the project by ex-Googler, Lawrence Diao, and machine learning expert Josh Chen – all three graduated summa cum laude (with the highest distinction) in Computer Science from Princeton. The company is still deciding whether to issue tokens through a public crowdsale, as it is assessing the current regulatory environment, he added.
As with Telegram’s recent closed sale, buying Basis has only been an option for accredited investors thus far. Also like Telegram, Basis is still considering whether or not to open the sale to the general public given the recent attention ICOs have attracted from regulators.