Could e-Money (NGM) Become the Terra (LUNA) of 2022?
By Mark Grabowski
Summary
Stablecoin cryptocurrencies have been hot lately, but top projects all have weaknesses including undercollateralization and regulatory concerns. e-Money’s stablecoins may solve these problems.
Its Euro-pegged stablecoin is compliant with government regulations, fully backed by fiat and regularly audited.
The low-marketcap cross-chain project has the potential to become a major player in the $170 billion stablecoin market.
Its cryptocurrency has doubled in price in the past month, despite a downturn in the overall crypto market. Upcoming catalysts could pump NGM’s price higher.
Stablecoin projects have been hot lately.
Terra (LUNA), a project which offers the UST stablecoin, increased in price from approximately 50 cents to $100 per coin in 2021. Meanwhile, Frax Share, the governing token for Frax stablecoins, went from about $1.50 to almost $40 during the past 6 months.
e-Money (NGM) could be the next stablecoin project to pop.
The low marketcap, cross-chain cryptocurrency has started gaining traction. In the past month, its price has more than doubled, from 70 cents to $1.49 per token — despite a downturn in the overall market during that same period. With a marketcap of about $55 million, NGM doesn’t even rank among the top 600 cryptocurrencies and has lots of room to grow. Consider that Frax Share (FSX) and Terra Luna (LUNA) marketcaps are, respectively, 25x and 531x greater.
Could NGM experience a run like LUNA?
InvestorsObserver recently gave NGM a “very bullish” rating. The project has also received publicity from well-known cryptocurrency shillers such as Chico Crypto. And respected crypto analysis site Blocknomy named E-money one of the “Hottest Crypto Projects” and gave it an “Outstanding Verdict.”
To understand e-Money’s potential, let’s take a closer look at the stablecoin sector and why NGM may offer a superior product.
Why stablecoins matter
Stablecoins are cryptocurrencies designed to remain steady in price, making them suitable for use as a store of value and a medium of exchange. They represent a huge market, with stablecoins growing from a total marketcap of $250,000 in 2015 to nearly $170 billion in 2021 and typically accounting for about half of daily trading volume among all cryptocurrencies. In fact, 49 of the top 50 cryptocurrency markets (or trading pairs) by volume involve a stablecoin.
Despite the recent and rapid growth in the stablecoin market due to instability in the cryptocurrency market, existing stablecoins have glaring weaknesses.
Collateralized stablecoins such as Tether (USDT) and USD Coin (USDC) have come under scrutiny from U.S. regulators for claiming to be backed 1:1 by U.S. dollars. The Biden Administration and Congress may soon impose strict regulations, according to media reports.
Meanwhile, algorithmic stablecoins, such as Terra USD (UST) are inherently unstable and inefficient, relying on overcollateralization to protect their system. At larger scales, algorithmic stablecoins struggle for immediate liquidity. Algorithmic stablecoins have a history of imploding spectacularly — and some experts predict the same result for UST. Terra is also facing scrutiny from U.S. regulators.
Why E-money could moon
e-Money, based in Copenhagen and co-founded by the inventor of AdBlock, believes it can capture a significant portion of the stablecoin market by offering stablecoins that are superior to existing products.
First, e-Money’s stablecoins avoid U.S. regulation concerns because they are pegged to European currencies, not the U.S. dollar, and are already compliant with EU law. Second, they have no risk of de-pegging because they are fully backed by actual fiat in the bank, which is audited quarterly by accounting firm Ernst Young. In fact, e-Money stablecoins can be exchanged with the team for fiat. In addition, the stablecoins are interest-bearing, which means they adjust to market conditions and the going savings rates offered by European banks.
Meanwhile, e-Money’s token, NGM, secures the e-Money network by bonding with validators. NGM incentivizes and creates value for holders through two features. By staking their tokens with validators, holders earn rewards — up to 20% APY per year. In addition, a portion of all stablecoins that are issued will be used to buyback and burn NGM tokens. Thus, more adoption of E-money’s stablecoins will drive up NGM’s price.
E-money initially launched its NGM token on Cosmos in early 2021 and later, in October 2021, released its e-Money Euro (EEUR) stablecoin, which is pegged to the Euro. (However, it should be noted that the team had been working on the project for a few years prior to that and invested considerable time on legal compliance.) The cryptocurrencies are now also available on the Ethereum and Avalanche networks. Already EEUR is the 2nd-most used Euro-pegged stablecoin by daily volume.
The project also just finished rebranding, which they announced on Twitter.
📣 e-Money completes rebranding & digital transformation. Our website with a complete design revamp is now live – https://t.co/USBzaeQUpw 🥳🎊🍾@burocratik Thank you so much!!! We 💛 our new website, and it was a pleasure to work with such a talented team! 🤝🙌🏻🪅
More catalysts are coming that could drive adoption and price action.
E-money is working on bridging its NGM token and stablecoins to new blockchain platforms, including Elrond, Algorand and Binance Smart Chain, and listing them on additional decentralized and centralized exchanges. NGM is currently sold on KuCoin, AscendEx and Uniswap. It is also sold, along with the EEUR, on Osmosis and Sifchain. The team also plans to release stablecoins pegged to other currencies, such as the Swiss franc, British pound and Japanese yen.
Ultimately, they hope to create fiat on-and-off ramps for their stablecoins to allow merchants to accept them as a form of payment in the same way thousands of merchants now accept Bitcoin as payment.
“We have created a platform that I believe has the potential to go mainstream one day where essentially you could have an app and pay in your supermarket for your groceries using the tokens we have,” co-founder Henrik Aasted Sørensen said in an interview.
Such a development could catapult NGM into a multi-billion dollar marketcap project. But that will probably take time. Like LUNA — which released in 2019 that took a couple of years to gain traction — patience may also be required for NGM investors. Those who manage to “hodl” could witness a LUNA eclipse.
