The Risks of Flatcoins in the Crypto Market

Flatcoins, a new type of stablecoin designed to maintain purchasing power parity with a basket of goods by keeping up with inflation, have hit the market. However, they are complicated and risky, and it is not clear whether they will actually work. Flatcoins are the brainchild of former Coinbase CTO Balaji Srinivasan and programmer Sam Kazemian, who came up with a stablecoin protocol named Frax in 2021, and an inflation tracking index called Frax Price Index (FPI). So far, only about $100 million in flatcoins have been minted, but demand for these novel tokens is growing.