This perfect storm of freak economic events has proven fertile ground for SGA’s case to be made as an alternative SoV. Its architects, Saga Monetary Technologies, believe that SGA’s economic modeling, which includes being backed by a basket of fiat currencies that mimics the IMF’s Special Drawing Rights, will make it more resistant to global shocks and better able to retain its value. So far, Saga’s team has been vindicated, with SGA adhering closely to the $1.35 mark on the open market, despite unprecedented crypto volatility.
Barry Topf, Saga Cheif Economist explains what is the SDR
Saga founder Ido Sadeh Man said: “The turbulent times we are experiencing nowadays pose a challenge to many people seeking to switch over to digital assets: the growing need to diversify their portfolio clashes with technological difficulties in choosing to do so over the blockchain,” before emphasizing the convenience of SGA holders being able to utilize ZenGo’s crypto storage solution, which abstracts private keys, relying instead on mathematical shares that provide a more user-friendly wallet recovery system, without compromising on security.
Making Hay While the Sky Collapses
While SGA has been breezing through March, other crypto assets have struggled. Major cap cryptos including BTC and ETH lost almost 50% of their value on March 12, with cascading long liquidations on BitMEX fleetingly dragging bitcoin down to $3,700 before rebounding. The falling price of ETH, meanwhile, led to miners powering down their machines, reducing the network’s capacity to clear the mempool just as on-chain activity was ramping up as traders flocked to send crypto to exchanges. Spiraling gas prices resulted in MakerDAO liquidations failing to go through, leading to $4M of ETH being auctioned off for $0.
MakerDAO’s SAI and DAI stablecoins have since lost their dollar peg and fiat-backed stablecoins such as USDC have had to be introduced to shore up its multi-collateralization system. Meanwhile, many global currencies, from the Euro to the British Pound, are falling as the effects of the coronavirus intensify, with GBP falling to its lowest level against the USD in 35 years. The global pandemic has proven to be the making and breaking of certain companies and sectors.
As investor Paul Graham observed, “Email lately is a strange mix of startups trying to figure out how to avoid being destroyed by the coronavirus, and others trying to figure out how to handle the unprecedented demand.” Something similar is occurring with cryptocurrencies, some of which are withering and dying in the face of hostile conditions, while others are flourishing. If SGA emerges from the other side of this storm with its store of value credentials intact, it will have forced a major rethink of what stability means within the cryptosphere.