Vow Introduces the Next Step in Crypto-Based Currency Development

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Since early 2021, the cryptocurrency industry has seen a significant surge in popularity as institutions and individuals flock to the rapidly developing space in large numbers. While the barrier to entering space has decreased significantly since its inception a decade ago, there are still several sticking points that make it difficult for wider adoption, especially when it comes to interacting with local fiat currencies.

There is a need for an effective and efficient liquidity bridge between cryptocurrencies and merchants that will only get stronger as the industry evolves. Additionally, the influx of new entrants – most of whom are retail investors or traders – is creating increased volatility that could make the industry’s mass adoption unsustainable in the mainstream financial world. Even with the stablecoin space expanding in response to these issues, it is not entirely ready to target those industries that could get the most benefit from their use; namely trade. What is needed is a solution to accelerate cryptocurrency and stablecoins adoption that doesn’t fake crypto acceptance by merchants by automatically converting crypto to fiat with a prepaid card or crypto-to-fiat gateway.

Enter vow (R), a company developing an alternative to stablecoins ^vCurrencies. Unlike money in a bank account, ^vCurrencies are backed by thousands of independent trader pledges. They exist in an ecosystem that drives both local and global trade, and they have an impact on promoting and increasing the use of blockchain-based assets for trade. Indeed, ^vCurrencies are already used in the background of bonus programs in 11 countries. By posting their transactions at a second-level scaling level (operated by Aventus Network), these rewards programs have processed a combined 8.5 million historical transactions to date prior to public launch. This article discusses Vow’s solution in detail. It will examine the company’s innovative new approach to stability as well as the benefits of its rapidly growing trading ecosystem. But first, what is vow and how does it work?

What is vow and how does it work?

vow‘s mission is to decentralize currency issuance and establish itself as a universal bridge for acceptance from crypto traders around the world. Vow’s unique approach targets the multi-billion dollar “pledges” merchants make to their customers in the form of coupons, points, cashback and gift cards, and their tokenization brings a new form of liquidity to life. His characters, the Vow “^v“Currencies” are fixed value discount stamps that merchants give out in lieu of their usual reward promises. Instead of $ 1 gift cards, cashback, or discounts, merchants simply reward their customers with $ 1 of ^vCurrencies instead. Customers then pick up theirs ^vCurrencies and exchange them at any time in the future for a fixed discount on the merchants’ goods.

As a result of acceptance against merchandise and services, ^vCurrencies have an equivalent benefit; That is, they reflect local fiat equivalents in all respects when a customer buys from a particular dealer. For example:

Merchant A’s Product X is $ 100 and comes with 20% cashback. When customer A buys product X in exchange for Fiat, he receives. worth $ 20 ^vCurrencies in their vow wallet and can use this 20. use ^vUSD to get a USD 20 discount on their next purchase.

Vow’s “platform” exists as an ecosystem of merchants and customers that enables these customers to spend their tokenized rewards at a wide range of merchants, effectively establishing a localized currency. So it is neither e-money, nor is it classified as a stable coin, as it does not specify any intrinsic value. In fact, it is a discount on goods and services.

Because it’s dealers who have problems ^vCurrencies to their customers, they stand behind it to protect the integrity of their brand. This also plays with the uniqueness of ^vCurrencies versus traditional stablecoins as there is no centralized company, government, private party or asset that is used to back up the value of the tokens at all times and consumers get them completely free.

In contrast, everyone is ^vCurrency retains 100% of its value with a 1: 1 equivalence with the local currency due to the merchant promises made to take them back in return for their goods and services.

In addition to ^vCurrencies itself, the heart of the Vow platform is a free-floating, limited-availability ERC777 cryptocurrency called VOW that traders need to buy in order to mint new coins ^vCurrencies. The value of VOW directly reflects the acceptance rate of the ecosystem.

A bridge between commerce and crypto

Indeed, ^vCurrencies, VOW and more Vow ecosystem are destined to be important tools for the adoption of cryptocurrency and blockchain-based technology for several reasons:

The ecosystem gives companies the opportunity to create a new liquidity pool that not only makes local trade easier, but also encourages industries that may otherwise be difficult to establish from the start.
^vCurrencies are basically easy to understand from the consumer’s point of view, an important feature to convince traders and customers to participate in the platform.
^vCurrencies are really decentralized, putting key stakeholders – traders and customers – first. As a result, traders can have complete confidence in the integrity of the ecosystem.
Traders benefit financially because ^vCurrencies and the wider Vow ecosystem reduce fiat spending and the cost of customer acquisition, resulting in more efficient cash flows.

Vow’s model embodies the shift towards an ecosystem-centric approach to retailing – a trend that encourages companies to build for all stakeholders, not just shareholders. The approach is fundamental to blockchain-based platforms and has resulted in a more even distribution of benefits for similar projects in the crypto space.

Chairman of the vow, Bishara Smeir, who talks about the need for dealer adoption, says:

“There is currently no significant demand for companies to accept decentralized currencies. Replace existing vouchers and credit products with ^vCurrency can be an easy step into a broader decentralized world. ”

How does ^vCompare currencies with stablecoins?

In contrast to free-floating cryptocurrencies such as Bitcoin, stablecoins are designed to keep their value stable. Traditionally there have been two approaches:

Linking stablecoins to fiat currencies by holding a corresponding currency amount in reserve,
Linking the value of stablecoins to a basket of assets (crypto-based or otherwise) via an algorithm that adjusts the value of a stablecoin in response to changes in the price of the items in that basket.

In trading, however, both approaches harbor potential risks and can pose a threat to the widespread acceptance of crypto payments by merchants.

The first approach requires traders to trust that a third party is holding large amounts of fiat currency to redeem. Reintroducing third parties into transactions goes against the ethos of the blockchain. This is also an expensive task in most developed countries that is riddled with compliance issues.

The second algorithmic approach offers a positive step towards decentralization. However, reliance on volatile crypto assets and a risk-return strategy that maintains fiat parity means that stability remains untested in extreme market conditions. ^vCurrencies are backed by products and services with the same unit value as their associated currencies ^vCurrency, therefore its value is perfectly correlated, eliminating the risk of the collateral deviating in value from the asset it is collateralized.

Conclusion: evolution through experimentation

All of the above shows vows commitment to expanding commerce through the application of blockchain-based technologies. At its core, however, Vow’s solution is fundamentally commercial and strategic in its implementation. Vow has investigated critical issues in the interaction between merchants and customers and applied a specific trade-oriented solution that takes advantage of the innovative new field of blockchain and cryptocurrencies.

In fact, this application encourages the ongoing experiment of decentralization in the mainstream industry, with Vow taking a clear lead. Vow’s unique dealer-led decentralized ecosystem approach will not only enable faster adoption of cryptocurrency and blockchain in retail, it will also pave the way for much more innovation in the future and trigger industry-wide adoption of new technologies.

For more on how to take vows ^vCurrencies are leading the way in an effort to create a liquidity bridge between all cryptocurrencies and physical or online traders, please visit their main page Here.

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