The new kid on the block, Volt Protocol is creating waves in the stablecoin industry with $2 million in funding. The seed round was co-led by venture capital firm Framework Ventures and Nascent. Volt Protocol, which was founded in April 2021, is a decentralized, inflation-resistant stablecoin. It tracks the Consumer Price Index released by the US Bureau of Labor Statistics. What sets it apart from other stablecoins like Tether or USDC is that Volt Protocol is not pegged to any fiat currency.
Michael Anderson, the co-founder of Framework Ventures, in an official statement, said the firm believes Volt is in a powerful position to make an impact across DeFi streamlining new and easily accessible forms of wealth preservation. Kirk Hutchison, the founder of Volt Protocol, says pegging Volt’s value to an inflation index than a fiat currency will give any DeFi investor the ability to preserve the value of their wealth. They don’t have to actively manage their funds or worry about the fluctuating interest rates and volatility. Hutchison said one of their primary goals is to emerge as the most scalable stablecoin. He revealed that Volt Protocol is working on new mechanism types to reach its goal. Volt Protocol chief pointed out that Ethereum and Bitcoin are amazing assets, but are not suitable as money because they are fundamentally volatile.
Stablecoins are actually a type of cryptocurrency, that is ostensibly backed by a real-world asset like gold, oil, or a fiat currency such as the US dollar. This removes volatility. There is another type of stablecoin that uses algorithms and other digital currencies to keep their pegs, such as UST or DAI.
Volt Protocol is the latest project to join the growing list of stablecoins without a physical asset backing it.