To Build A Price-Stable Cryptocurrency, Basis Comes Backed With $133 Million From Top VCs and Shutting Down And Returning The Money- Part 1
The situation of Basis is explained in the two parts with a detailed letter from Al-Naji. Read on and know all the reasons behind it being closed down. The facts are quite interesting
Where Did It All Start With Basis?
A now 18-month old, Hoboken, N.J based cryptocurrency start-up working on a stable coin with an elastic supply that is ostensibly expanding and contracting is now keeping its value at about a dollar instead of all over the map. With a big idea, the company develops a new token where people can use instead of use to speculate.
A lot of the investors have thereby fallen in love with the concept. Therefore it is found that Basis has thereby landed $133 million in funding from Bain Capital Ventures, GV, the long-time hedge fund manager Stan Druckenmiller, one time Federal Reserve governor who was Kevin Warsh, the Lightspeed Venture Partners, the Foundation Capital, also Andreessen Horowitz, the Wing VC, thereby the NFX Ventures, as also Valor Capital, ZhenfundCeyuan, the Sky9 Capital, and the Digital Currency Group along with others.
Led by CEO Nader Al-Naji the same team that co-founded the company with former Princeton classmates Lawrence Diao as well as Josh Chen saying it is shutting down the project where Basis is returning to investors the capital it hadn’t used in trying to make a go of things.
Thereafter as he explains in a post at Basis’s site, Al-Naji says it has the technology road map and the US securities regulations didn’t quite mix as he more specifically writes, the founders didn’t foresee some of the ripple effects of the regulatory guidance is received.
All The Reasons Behind Basis
He further explains that for one thing Basis thereby realised that there would be no way to avoid securities status for bond and share tokens and that it is due to their status as unregistered securities, bond, and share tokens being subject to transfer restrictions with it being responsible for limiting token ownership to the accredited investors in the US for the first year after issuance and the performance eligibility checks on international users.
Hence as AlNaji continues, part of the problem with this scenario is enforcing transfer restrictions requiring a centralised whitelist meaning the system would not only lose the censorship resistance but also has the on-chain auctions that are significantly less liquid. With fewer participants, ultimately in those on-chain auctions, it would adversely affect the stability of Basis as he adds which was sort of the whole point.
In this context, it is not clear as to what has happened to Basis as the so-called stable coins come to be simply not viable or whether the particular approach is to the asset with price stability characteristics which was ill-planned. The technology remains unproven even as a stable coin rush got underway as though its easy to grasp how they could spur the adoption of crypto payment applications. This is where Garrick Hileman, the head of research at the cryptocurrency services firm Blockchain told that there were a handful of stable coins in the works.
To learn more as we reached out to some of Basis’s investors, it is worth noting that it is even when Basis had raised the giant round of funding where Al-Naji was candid about knowing when Basis’s token would be in circulation. Even though not to us directly, he never made aggressive promises that Basis was unable to keep.
Presenting The Whole Letter As Written By Al Naji
The full text of his letter to investors and supporters are mentioned below.
As they set out eighteen months ago, with the ambitious goal to create a better monetary stem which was one that would be resistant to hyperinflation free from centralised control, and it is more stable and robust than those of the monetary systems that came before it. It was thereby noted that this goal would create tremendous value for society if achieved and one they felt well-positioned to take on. Therefore, they started with a white paper proposing a stable decentralised cryptocurrency called Basis with the potential to fulfill the vision.
The Discussion Doesn’t End Here: There Are More Ideas In The Later Part Of The Letter
Here is the reason behind the Basis being shut down. As Al-Naji puts it there are many of the reasons presented for the cryptocurrency in the continuation of the letter. Get all the ideas presented by him for a clearer view according to him. So why do you hesitate, move on and get the whole letter as presented by him to explain all about Basis and its performance? We are sure you get the whole context of the situation faced by Basis and its counterparts.