This year has been one of the most ‘bullish’ cycles for crypto market fundamentals as more stakeholders shift attention to the value proposition over speculation. While a better part of the year was driven by the Decentralized Finance (DeFi) speculative outlook, this did not last long before fundamentalists went back to building viable products. Currently, there are quite a number of crypto innovations whose core is the financial services industry; an emerging trend to disrupt the traditional finance scene.
One such project is the HODLCommunity innovation, a decentralized collective saving ecosystem. This initiative leverages the Ethereum blockchain to run its smart contract, which in turn harmonizes the value and distribution of its crypto-community token dubbed ‘HODLC’. According to their whitepaper, HODLC is a community-driven social experiment where no one owns the underlying smart contract.
The HODLCommodity Decentralized Savings Mechanism
Today, the most common saving avenues are financial institutions such as banks and investment firms who have more muscle in pooling funds from various investors. This does not have to be the case in the era of Web 3.0, where decentralization is gradually shaping modern-day markets. HODLCommodity is just one of the outstanding projects that has since embarked on niche financial services based on a decentralized infrastructure. In this case, an ecosystem where users can save and accumulate wealth as per the HODLC underlying tokenomics.
It is quite noteworthy that tokenomics has proven to be integral in the development of DeFi networks to avoid arbitrage situations, given some inefficiencies in the nascent market. Well, the HODLC tokenomics touts a new way to create value by defying the current challenges in already implemented models. HODLC token which is created as crypto-commodity derives its value from the underlying smart contract.
With the maximum HODLC supply capped at 20 million, these tokens are available for purchase via the HODL DEX. Notably, HODLC tokens are denominated in $USD to avoid the high volatility linked to crypto markets. As highlighted earlier, the tokens can only be bought or sold hence the ‘crypto-commodity’ status. However, HODLC owners can further extract value from their tokens by redeeming for the platform’s native ERC-20 token, HODLT.
HODLCommodity’s ERC-20 Token; HODLT
While the HODLC token operates as a crypto commodity, the community can further derive an external value by using the project’s ERC-20 token, HODLT. Unlike HODLC which cannot be transferred or given to another person, the latter can be traded on centralized exchanges, used as a means of payment and for charity donations. HODLC owners also have an option to lock HODLT tokens into a certificate with a flexible redemption at any time.
The Ethereum blockchain provides an ecosystem with high liquidity for HOLDT token utility amongst other features such as integration prospects. To maintain autonomy, the HOLD network is designed such that the Ether used to purchase the tokens is distributed on a random basis to HODLC owners. They can seamlessly redeem this for HOLDT tokens and realize value by trading them against other crypto market pairs, making payments or donations.
Value Proposition in the Financial Services Industry
As is the case with most innovations, HODLCommodity has also been designed as a solution to prevalent shortcomings. Being a crypto-based project, the solution focuses on the financial services industry and savings in particular. That said, the project paints a picture of what future markets might look like, should DeFi prove sustainable.
This initiative opens an opportunity for all sorts of investors to acquire stake in a fully decentralized financial product. Also, it is pushing for the adoption of cryptocurrencies by enabling merchants to accept the HODLT ERC-20 token as a means of payment.
Going forward, the HODLCommodity community plans to scale its crypto service suite by integrating other financial products such as interest-free loans, pension funds, education funds, retirement savings and HODL-backed credit avenues.
Conclusion
The financial services industry is probably the most compatible sector with cryptocurrencies and blockchain technology. It therefore makes sense that crypto-focused innovators have been paying a keen attention in the integration of both worlds. While it may take a while, it appears that the sun is already rising for DeFi products with a cutting edge.
The decentralized savings mechanism by HODLCommodity is an example of the evolving nature of finance. In future, such ecosystems will not only define financial products but also tangible commodities such as property and inventory. That said, there is still a lot of work to be done in terms of security and tokenomics models before the whole world adopts decentralized networks.
