A new digital currency called Saga, which is backed by a basket of currencies that mimics the IMF’s Special Drawing Rights, is set to launch on December 10. At launch, SGA will have the same model as many of the stablecoins on the market today but it will move further away from the model if the currency gains adoption and trust. A section of a press release issued by Saga reads:
“At launch, SGA will be fully backed by a basket of national currencies that replicate the International Monetary Fund’s SDR. Based on the SGA’s market movements, measured by the number of tokens issued, the Saga monetary model will gradually diminish reliance on the reserve as user confidence in SGA grows. Together, these measures are designed to reduce price volatility while allowing SGA to grow beyond a simple fiat-backed / pegged stablecoin.”
The coin will bear the ticker SGA and function as an ERC20 token on the Ethereum network.
Not for speculators
Saga Foundation founder Ido Man told Decrypt that even though the value of SGA will fluctuate, it will likely not be an attractive currency for speculators:
“If anyone wants to speculate, SGA is probably not the proper vehicle. If the market cap grew by $1 billion overnight, the price of SGA wouldn’t even double.”
SGA holders will be able to participate in Saga’s governance process – they will be able to elect the project’s executive council, for example.
The project has opened the onboarding of SGA buyers, who have to complete a know-your-customer process first. The level of the information required from buyers depends on the amount of SGA they intend to buy.
Saga has received $30 million in seed funding from investors including the likes of Lightspeed and Vertex Ventures. The project’s advisory board boasts prominent names from the world of finance and economics – JPMorgan Chase chairman Jacob Frenkel and economics Nobel prize laureate Myron Scholes.