MahaDAO ($MAHA / $ARTH): Can it fight depreciation?

MahaDAO has a bold mission: to correct the systemic flaw of inflation and hyperinflation in global economic systems. Thereby resulting in currencies across the world continuously depreciating, and reducing their purchasing power in the long run.

Background

Steven Enamakel is the founder and CEO of MahaDAO. His interest in Computer Science and Economics is a driving force behind the development of MahaDAO.

He has written several opinion articles detailing how he thinks the crypto community can help the overall economy.

Prior to the dissolution of the Bretton Woods system, inflation was uncommon and hyperinflation did not exist. This was because governments could only increase their monetary supply in line with those of gold reserves held by them.

Since then, neoliberal and monetary policy has taken over. And whilst they have delivered tremendous growth, it is at the expense of cycles of economic crisis and chronic inflation.

There is no denying that the COVID-19 pandemic has affected the world’s financial health. Many countries have seen the value of their currency drastically depreciate as they attempt to stimulate their economy in response to the effects of the virus.

Some of these countries are, unfortunately, resorting to either borrowing or minting new fiat money, which in the end, likely undermines their inflation-infested economy. As it appears, these extreme measures have a negative effect on a state’s financial health, in the long run.

As a response, the team behind MahaDAO has come up with an idea of a valuecoin that ensures stability in buying power over time as opposed to stability in price.

What is MahaDAO?

MahaDAO is a decentralized autonomous organization (DAO) that is managed and governed by members of the MAHA community and is built on the Matic Network. Here, token holders play a central role in the operation and maintenance of the decentralized body.

The community has two major tokens: MAHA and ARTH.

$MAHA

MAHA is the token held by key members of the Maha ecosystem, which plays a very important role in the activities and the overall development of the community.

It is a governance token that allows its holders to vote on major decisions of the ecosystem. Holders are tasked with keeping the ARTH valuecoin (see below) stable at all times, regardless of the economic situations that might be prevalent in the world.

Basically, the success of MahaDAO depends largely on its governors, therefore, MAHA holders are the major determinant of all activities within the space.

$MAHA Tokenomics and Allocation

There will be a total supply of 10 million $MAHA tokens to be accessible over 10 years. The initial allocation is as follows:

  • 70% (7,000,000 MAHA) to MahaDAO community members;
  • 15% (1,500,000 MAHA) to private sale investors:;
  • 7% (700,000 MAHA) to team members and future employees;
  • 5% (500,000 MAHA) to seed investors; and
  • 3% (300,000 MAHA) to advisors.

At the end of year 4, there will be a perpetual inflation rate of 2% (200,000 MAHA) tokens per year.

MAHA 10 year release schedule
MAHA 10 year release schedule (Image credit: Medium)

$ARTH

The ARTH Valuecoin is a stablecoin specifically designed to maintain its purchasing power indefinitely, a first of its kind in the world. And with it, the MAHA community intends to revolutionize the current inflated financial landscape.

While there are loads of stablecoins in the crypto space, the reality is that these stablecoins are pegged to the US Dollar which is also very susceptible to the inflation and depreciatory tendencies we spoke of earlier. In fact, 35% of all USD was printed only last year, and more minting events are expected to come shortly in 2021.

This is where ARTH is aimed to make a difference since this valuecoin differs greatly from a normal stablecoin and is geared towards enabling holders to have a constant and stable buying power regardless of the economic situation.

Here, every time a holder of ARTH stakes their volatile collaterals in a Collateralized Debt Position (CDP), they generate ARTH.

What is a valuecoin?

A valuecoin is a currency that is not stable in price, but in value (unlike a stablecoin). Valuecoins never erode its intrinsic buying power.

To put in basic terms, it means that if an item (e.g. a teddy bear) were to cost 3 ARTH now, it would not cost more in the future. So the same teddy bear would continue to cost 3 ARTH- whether 5 years from now or even in 10 years’ time, if not less.

The team of developers at MAHA were able to achieve this through reworking the reserve vault of MakerDAO. The vault of the stablecoin now acts as a regulator and helps to manage the collaterals that might be locked in it and at the same time, help to steadily generate and back the ARTH token.

In essence, the ARTH valuecoin could, in the long run, be a viable and natural successor to stablecoins.

Use cases for MahaDAO

The MahaDAO community would have the following features:

No transaction fees

All transactions on this ecosystem are free, which means that users can receive and send ARTH without being charged a dime for their transaction.

Since MahaDAO is built on Matic Network, the system is effectively able to protect its users from transaction fees while also ensuring the ease for third-party applications to integrate into the system at little to no cost to them.

Fast Transactions

The team at MahaDAO labels transactions on the system as light speed. This is because they have worked on developing the transaction speed of the ARTH coin to be as fast as 3 seconds per transaction.

One of the developers’ goals is to make their transaction speeds remain amongst the lowest in the industry.

A Worthwhile User Experience Interface

Many project runners in crypto have been oblivious to the experience of their users. A lot of developers prioritize the implementation of a groundbreaking concept over pleasing their users.

MahaDAO, however, takes user experience very seriously aims to make it as seamless and enjoyable as possible, while at the same time, making use of their platform to disrupt the financial industry.

Maha Liquidity Mining

Generally, DeFi seeks to reward their users who deploy their crypto assets for the running of the system. This is no different in MahaDAO as it takes a community approach towards market making which at the end seeks to reward those who provide liquidity to the markets with MAHA tokens.

It would take farming MAHA token for 5 years by those providing liquidity to create the ARTH token. Mining rewards are going to be distributed weekly, and a miner can also stake the ARTH token to earn interest.

Conclusion

Every year, the buying power of fiat currencies tend to erode. What one US dollar can buy today, it would be unable to do so in 2 or 3 years time because of the level of inflation and depreciation that might have affected the currency.

While the crypto industry has come up with the idea of a Stablecoin that is pegged to these currencies, the problem with this idea is that it is very susceptible to the degradation that happens to those fiat currencies.

This is where the MahaDAO idea of a valuecoin whose buying power remains same for a considerably long time. What one valuecoin is able to buy today, it would be able to buy the same thing in 5 years too.

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The information provided in this article is intended for general guidance and information purposes only. Contents of this article are under no circumstances intended to be considered as investment, business, legal or tax advice. We do not accept any responsibility for individual decisions made based on this article and we strongly encourage you to do your own research before taking any action. Although best efforts are made to ensure that all information provided herein is accurate and up to date, omissions, errors, or mistakes may occur.

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