In the cryptocurrency industry, there are many different projects worth keeping an eye on. It also appears there may be a lot more stablecoins to be launched in the near future. Whether or not MUSD will be part of that equation, is difficult to predict. While it has an official website and everything, one has to wonder if it can be trusted.
The MUSD Concept
As is the case with any stablecoin clone with a minimum guaranteed value, one has to wonder what its purpose is and whether anyone will even use it. Those questions may prove a lot more difficult to answer. In the case of MUSD, it seems the team aims to introduce a new way of shopping and paying for goods and services with this new stablecoin. So far, there isn’t anything really innovative about that concept, as this is the definition or any digital asset in the world today.
The name “Master USD” might not necessarily get too many people interested in what the project is about either. To top it all off, the team is promoting this token as an investment opportunity. Very unusual, as a stablecoin is designed to maintain its peg to the US Dollar at all times. Even so, it seems this currency works very differently under the hood, which will undoubtedly confuse a lot of people down the line.
What is it Exactly?
While it would appear MUSD is labeled as a potential stablecoin, it will instead maintain a guaranteed minimum token price. It will also be “the only token protecting early investors from losing money.” While that sounds rather interesting on paper, it simply doesn’t work in the real world. Financial markets are volatile by nature, and trying to oppose this fact is asking for trouble. Although the current can be sued for buying and selling goods and services as well, that will not help it maintain a value whatsoever.
To make things even more intriguing – for better or worse – there appears to be an investor protection system. Those who buy MUSD at an early stage will be offered a guarantee the token price cannot go below the value they purchased at. How that will be maintained other than through sheer manipulation, is very difficult to determine. One cannot guarantee a minimum value whatsoever, especially not in the world of cryptocurrencies and digital currencies.
Should Anyone Invest?
That question is not something that can be answered with a simple yes or no. There are plenty of signs which indicate this project is anything but legitimate, and should certainly not be confused with a stablecoin. There have been numerous projects which aim to embrace a similar business model, yet they all either disappear or collapse within the first two years due to it being unsustainable. Whether MUSD will be any different, remains to be seen.