Responses to questions regarding the $FIAT ERC-20 token
What is $FIAT?
- $FIAT is an ERC-20 token that is minted against fixed income assets originating from various DeFi platforms. The FIAT DAO system is designed to ensure that the total $FIAT debt outstanding is fully backed by deposited collateral value at all times.
Where do I acquire $FIAT?
What is the expected price of $FIAT?
- The protocol mints and burns $FIAT at a hard-coded value of $1. If the secondary market value of $FIAT deviates from $1, users can profit by either minting more $FIAT when price is above a dollar, or by burning cheaply acquired $FIAT when price is below a dollar. $FIAT is burned either when a user pays back their own debt of previously minted $FIAT, or when they participate in the auctioning of liquidated collateral.
Is $FIAT a stablecoin, and how does it compare to other such projects?
- $FIAT is minted via collateralized debt positions, similar to how $DAI is minted in the MakerDAO system. It is not an "algorithmic" stablecoin (e.g. UST, sUSD) insofar as it does not rely on endogenous collateral to back the circulating supply of $FIAT. Deviations from a secondary price of $1 should be considered indicative of either excess $FIAT in circulation or unsatisfied demand for $FIAT. That is to say, because of the less liquid nature of the collateral accepted by FIAT DAO, the potential for deviation from the $1 target is greater than similar systems which only accept spot assets.