Folks have had questions about Afreum stable country tokens (tokens starting with S for “Stable” and ending with a country ISO 2 code such as NGN for Nigeria) for as long as I can remember. Some of the more common questions are: What’s the point of holding an Afreum stable country token? or What’s the difference between an Afreum stable country token such as SNGN and an Afreum flexible country token such as ANGN. We will address both these questions, and demonstrate how stable country tokens can be used, in this article.
First we need to understand the tokenomics of the Afreum ecosytem. Afreum tokenomics comprises the following:
1. A global transaction layer — AFR token
2. A governance and incentives/rewards layer — AFRX token
3. A speculative investment layer — Flexible country tokens such as ANGN, AEUR etc.
4. A fiat-tracking stable layer — Stable country tokens such as SNGN, SEUR etc.
Together these tokenomics layers provide choice to users of the Afreum ecosystem. In the sense that if you want interoperability in the Afreum ecosytem you hold the AFR token, which can be converted into XLM, USDC or any other Afreum token via Stellar liquidity pools or trading on the Stellar DEX. In addition AFR can be moved to CEX exchanges where it is listed and traded there for BTC, ETH, BUSD and USDT. If you want to participate in Afreum ecosytem governance you earn/buy and hold the AFRX token, which can be used to submit proposals, vote, and perform other actions in the Afreum DAO. Since AFRX is the reward token it is a proxy for participation in the Afreum ecosytem.
You hold any of the flexible country tokens as a speculative bet on future demand for those tokens, which have a limited fixed supply. So if you think there will be many Indian users in the Afreum ecosystem over time (using apps such as Afreum Pay) you may hold AINR tokens, the price of which is independent from the price of the Indian Rupee. If you are are risk adverse and want to maintain the value of the underlying fiat you may hold a stable country token such as SZAR, put it to work earning yield and AFRX tokens and cash out to the equivalent value in USDC without taking on any risk of crypto price movements.
Now that we have that out of the way let’s talk about the utility of Afreum stable country tokens. Obviously, when Afreum Pay launches you can theoretically use these to pay for goods and services on a 1:1 basis. E.g. You would pay excactly 5 SINR for a product priced at 5 Indian Rupees in a supermarket in Bombay. Stable country tokens also allow you to potentially profit from forex movements. Recently the British Pound was very low against the dollar. You could buy SGBP with USDC when the Pound is low, and redeem SGBP back for USDC at the higher exchange rate when the Pound rises. The difference between the USDC you paid for the SGBP and the USDC you received (through direct redemption) for the SGBP you redeemed is your profit. A simple experiment with the pound realised a 15% profit in a matter of days. The reason why this is possible is that you know you can purchase SGBP at any time with USDC, and exchange it back at any time using the Redeem button on the Stable tokens page. USDC reserves are published on this page and you can always purchase and redeem against those reserves.
Stable country tokens are an important part of the local country strategy for Afreum ecosytem. They have relevance to riskless local payments (pay exactly the fiat price in the stable token), to P2P transaction in Afreum Cash (give me 50 Naira and I give you 50 SNGN), to Afreum Save (I want the value of my saved funds to not change relative to my local fiat currency and I want to earn interest on it).
What will you do with Afreum stable token Acquisition and Redemption? Let us know in the Afreum Telegram groups.