Basis Coin Startup Gets $133 Million From Investors

Basis, a virtually currency startup, has raised funds reaching approximately $133 million in a private placement. This was revealed by the co-founder and chief executive officer of Intangible Labs, Nader Al-Naji. Intangible Labs created Basis, which is a digital currency aimed at maintaining a stable price.

Some of the investors in Intangible Labs include Lightspeed Foundation Capital, Andreessen Horowitz, Google Ventures and Bain Capital Ventures. Kevin Warsh, a former governor of the Federal Reserve, and Stan Druckenmiller, a billionaire hedge funder, also participated in the fundraising round.

Price stability

The new cryptocurrency is built on the blockchain of Ethereum. According to Al Naji the new token comes with a built-in mechanism which controls the supply of the cryptocurrency in order to ensure that the price remains stable.

“Volatility of cryptocurrencies has prevented their widespread adoption. We are trying to build cryptocurrencies that have all the benefits of crypto but is stable,” said Al-Naji.

According to Al-Naji the startup is considering whether it will be necessary to issue tokens via a public crowdsale. At the moment the startup is conducting an assessment of the regulatory environment.

One of the problems that Basis was created to solve is the high inflation rates in the developing world and these countries are thus going to be one of the target markets for Intangible Labs. Additionally Basis will be targeting the crowdfunding market. This is because when the period of crowdfunding runs for several days currency prices may fluctuate and this could have a negative impact especially when the movement is downwards.

Stabilizing mechanism

Intangible Labs is also hoping digital currency exchanges will embrace Basis in order to effectively deal with pricing gyrations. To maintain price stability the mechanism that Basis will employ involves issuing more currency when demand rising and reducing the supply when demand is falling.

This comes in the wake of a regulatory crackdown across the globe on digital currencies slowing the sales of virtual currencies as questions are now being raised about transparency as well the risks that investors face of being scammed. Over 500 tech startups spread all over the world have managed to raise funds by selling tokens thereby sidestepping venture capital firms and banks as intermediaries.

Consequently regulators all over the globe, including the Securities and Exchange Commission of the United States, have tightened screws with respect to Initial Coin Offerings. New rules and guidelines have consequently been instituted and this has given investors pause and delayed new offerings.

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