Unlike stablecoins, which are fixed to the nominal value of a currency or asset, Flat Coin is designed to maintain a constant quantity of goods that can be purchased regardless of rising living costs. In other words, if the value of fiat currency increases, the value of Flat Coin also rises, offsetting the perceived rate of inflation and providing a consistent value maintenance and better investment returns.
Flat Coin is backed by a software-based algorithm instead of actual collateral. It is pegged to a broad range of inflation indices to maintain a stable level of purchasing power across various financial situations and countries. Its real value is kept constant regardless of fluctuations in fiat currency or inflation rates, which traditional stablecoins cannot achieve. As inflation rises, the supply of Flat Coin is increased to match rising prices, ensuring purchasing power.
Although FlatCoin and stablecoins share the goal of price stability, they achieve it through different mechanisms.
| Flatcoin | Stablecoin | |
|---|---|---|
| Price Indicators | Consumer Price Index (CPI), Commodities | Fiat Currency, Cryptocurrency |
| Price Volatility per Unit | Market Following | Virtually Nonexistent |
| Inflation Increase | Value Preservation | Value Depreciation |
| Market Access Approach | Decentralized Based on Centralized Indicators | Fully Decentralized |