ISC: The International Stable Currency backed by Real Word Assets (RWA)

ISC

What if there was a way you could buy a cryptocurrency that was basically cash? Meaning it is stable enough not to change value but was still transferable and tradable as a cryptocurrency. That kind of cryptocurrency is called stablecoins. Stablecoins are digital currencies minted on the blockchain whose value is pegged to another asset class, designed for non-volatility, and the intent of holding a stable value (i.e. 1 USDollar: 1 ISC).

There are four different types of stablecoins identifiable by their collateral structures; namely, fiat-backed, crypto-backed, commodity-backed, and algorithmic stablecoins. However, the most commonly used stablecoin is USD-Pegged, fiat-backed stablecoins.

Stablecoins are increasingly becoming a part of our everyday lives, especially in web3. They enable transactions between various cryptocurrencies and help provide liquidity… but the state of current stablecoins is fraught with all kinds of problems, some of which are highlighted below:

The problem

Note: Fiat-backed, USD-Pegged stablecoins are the most popular stablecoins in crypto and as of May 2023, 8 out of the top 10 stablecoins fall into this category. Consequently, these stablecoins are also fraught with all the problems that a Fiat-money, and USD-Pegged currencies will have.

• Systemic Risk: The stability of a stablecoin pegged to a Fiat currency, like the USDollar, is heavily dependent on the ability of the issuer of the stablecoin to maintain an adequate reserve of the asset backing the stablecoin. In the event of the issuer’s inability to maintain a proper reserve of the underlying assets, it runs into defaulting and causing a whole cascading, domino effect that depegs the stablecoin. This was quite evident in the Silicon Valley Bank (SVB) — USDC debacle that happened recently.
• Inflationary Risk: Stablecoins pegged to the Fiat currency, like the USDollar are also exposed to the same inflationary pressures of the Fiat currency backing them. For example, USDC is pegged to the USDollar, and if the USDollar experiences inflation or a decline in value due to excessive money printing, a default on its debts, or badly-set monetary policies, USDC will also lose the same amount of value as its backer (i.e USDollar). This can pose a risk for individuals and businesses that rely on USD-pegged stablecoins as a store of value.
• Mismanagement of Reserve’s funds: There’s been a history of the mismanagement of a protocol’s reserve in the cryptocurrency world, from FTX to Tether using some of its reserves (USDT) to bail out an exchange partner without any input from its community.
• No Benefit on Upside: Predominantly the current business model for stablecoin projects is for the holders to bear risks while the issuer invests billions in their reserves and keep the returns to themselves. This is not so different from the traditional (TradFi) banking system which the ideals of decentralized finance (DeFi) is the opposite of. Why should you and I take all the risk with our money and benefit nothing from the upside?
• Inadequate Community engagement in the design and use of the stablecoin, and what kind of projects it should support.

But is there a way to design something much better, that takes care of all the problems previously highlighted? The fundamental question for the ISC Team is:

“ What if there was a stablecoin project that directed the returns generated by its reserve back into its token’s value, rather than pocketing the money for themselves?”

Perhaps there is, through ISC!

ISC, The International Stable Currency is an inflation-resistant stablecoin pegged to an underlying basket of assets such as Cash Global, Commodities Gold, Bond Short-term Treasuries, Bond Global, and Equity Global. All these assets are inversely correlated and perform well in all economic environments. ISC is designed to grow in value over time, for example, Let’s suppose the above-mentioned underlying basket of assets which ISC is pegged to is worth $1:30, then ISC itself is worth $1.30. If the value of assets appreciates to $1.40, then ISC also is worth $1.40!

ISC achieves this through proper diversification, spreading risk across asset classes, industries, and geographical regions. This diversification help reduces the impact of any one investment on the ISC Reserve and helps to even out the ups and downs of the financial markets.

The initial target percentage allocation for these assets is:

This is however not set in stone and can be changed as seen fit by the community.

Community engagement is also one of ISC’s biggest selling points. People who hold the ISC Governance Token (IGT), which functions as the governance token for ISC are part of the ISC DAO and they have voting rights some of which are:

1. The right to improve the portfolio of the underlying assets based on percentage allocation. For example, increasing the percentage allocation of Global Bonds from 20% to 30%. All you need to do is just to set up a proposal via the smart contracts on the Realms platform and if it passes over the super majority (two-thirds), the reserve will be changed according to the votes
2. The right to elect a community auditor: This community auditor is elected periodically (every quarter) and checks ISC’s books (i.e. trades, reserves). In other words, check if the users’ money is safe! They then write a public report to the users on their findings.
3. Other voting rights include recalling ISC loans from an ISC Reserve, ISC Reserves’ Incentive Structure, ISC Issuer Interest Rate, and Grant Proposal.

ISC Vs USDT, USDC

ISC is believed to be a considerable improvement on Tether and Circle, which have absolutely no community oversight, allowing them to gamble with customer deposits while USDT & USDC users are left holding the bag 🤡. These are the 3 main reasons for this absolute belief by the ISC Team:

• ISC is not pegged to the USDollar unlike many other stablecoins but to the value of an underlying basket of assets held by the Reserves. This allows ISC to appreciate as the price of the underlying assets increases and generates a return. Nonetheless, like other stablecoins, ISC’s price is not expected to fluctuate wildly but to increase steadily increase over time as the reserve grows from the returns generated by the ISC Reserves.
• Resistant to Inflation (and perhaps hyperinflation) Caused by Money Printing: Other stablecoins pegged to the USDollar suffer the same inflationary pressures the USDollar has caused by money printing when more USD is printed into circulation. ISC differs by returning returns made by the ISC Reserves back into the price of the token which helps ISC to hedge against inflation over time.
• Community controlled Reserve: The Community behind ISC is one of its biggest selling points. The community controls ISC’s Reserve on the underlying assets, community auditing (and many more) through its governance token IGT. This kind of community engagement ensures that the interests of the community are always prioritized and the Reserves are managed responsibly and sustainably.

Currently, to have an IGT, you need to be an early ISC holder as IGT can only be airdropped to early ISC users! There’s 1Billion IGT in total supply, and 35% (i.e. 350M) will be distributed to early users over 4 years, with 5Million airdropped every month.

The amount of IGT you get is a function of the amount of ISC you own and how long you’ve owned it.

So you can go get your ISC currently on available on Jupiter!

If want to know more about International Stable Currency (ISC), reach out to the ISCTeam on Twitter and on Telegram here