What is Edelcoin (EDLC)?
Edelcoin, denoted as EDLC, is a unique digital currency in the cryptocurrency landscape. At its core, it is a stablecoin—a type of cryptocurrency engineered to provide stability in value, as opposed to the often wild price swings seen in traditional cryptocurrencies like Bitcoin or Ethereum.
What sets Edelcoin apart from other stablecoins is its distinctive backing. Unlike most stablecoins, which are typically pegged to fiat currencies like the US dollar, Edelcoin takes a different approach. It is fully backed by a basket of precious and base metals, such as gold and base metals like copper(written on homepage) making it a stablecoin backed by tangible assets.
The Edelcoin website makes some enticing claims that are worth examining closely. Let’s break down the purported benefits one by one:
Inflation hedge: With central banks engaging in unprecedented quantitative easing and money printing, high inflation is a valid concern for many. Holding currencies losing purchasing power due to rising prices is worrying. Edelcoin’s backing by real assets like precious metals provides a potential hedge against this inflation. If inflation reduces the dollar’s value, the metals backing Edelcoin could theoretically retain value better.
Yield opportunities: The fast-growing decentralized finance (DeFi) sector offers attractive yield opportunities superior to traditional interest rates. By utilizing Edelcoin in DeFi protocols and platforms, investors can potentially earn strong yields on their investment. This yield appeal is real, especially for “HODLers” holding the coin long-term.
Store of value: Assets like gold and silver have historically been effective stores of value during times of economic crisis. With its precious metals backing, Edelcoin markets itself as digitally replicating this store of value feature. This is an intriguing proposition in theory.
However, despite these benefits, some skepticism is still warranted:
- As a stablecoin, Edelcoin’s value is pegged to the dollar. So if the dollar loses purchasing power due to inflation, wouldn’t Edelcoin decline in tandem? Its stable value mechanics may dilute its inflation hedge appeal.
- Can a stablecoin pegged to a fiat currency also be a long-term store of value? This seems somewhat contradictory as its value is dependent on the dollar. Its metal backing does provide an added layer of stability, but it’s debatable whether this equates to a true store of value.
In summary, while Edelcoin has inflation hedging and yield earning potential, its stablecoin nature raises questions about its effectiveness as a long-term store of value and inflation hedge. As with any cryptocurrency investment, thorough due diligence is advised before jumping in.
Proud founder of Coin4Planet – joining crypto & sustainability. Investor since 2013, trader at heart. Tech geek, traveler, meetup addict.