CoinFLEX Introduces rvUSD Crypto to Support Fundraising for a $47M
CoinFLEX Introduces rvUSD Crypto to Support
Some intriguing narratives are developing as the cryptocurrency market tries to recover from the significant losses it sustained over the last two months. CoinFLEX is one of the most intriguing of them. After a significant investor failed to make a $47 million payment to the firm, the cryptocurrency trading and staking platform sparked discussion. It is currently employing innovative measures to recover the monies and restart the site.
CoinFLEX is a cryptocurrency trading platform, launched in 2019. Initially, the firm just served the purpose of futures trading. Its offerings have, however, greatly expanded since its introduction. The platform's native cryptocurrencies, flexUSD and FLEX, are among these offers. The staking possibilities offered by CoinFLEX are arguably the most noteworthy. It is without a doubt one of the most profitable ways to get passive income because the platform enables users to stake the FLEX token for returns of up to 300 percent.
CoinFLEX made headlines last week when it decided to halt withdrawals from its platform. Following "extreme market circumstances" the previous week, contentious action was taken. However, the corporation also mentions another puzzling explanation for the suspension; namely, that there is "continuing ambiguity surrounding a counterparty."
It turns out that the counterparty is one of the project's biggest investors. In an interview with sources, CoinFLEX CEO Mark Lamb gave an update. Market volatility caused the investor involved in the incident to see their accounts slide into the red. When confronted with CoinFLEX's margin call, the investor was $47 million short because of the enormous negative equity that resulted.
CoinFLEX Releases High-Yield rvUSD Crypto to Repay Debts
CoinFLEX appears to be using unconventional steps to recover the lost money. To raise money and settle its obligations, the business is launching the high-yield rvUSD crypto token.
The rvUSD cryptocurrency, which stands for "Recovery Value USD," is made up of CoinFLEX's bad debt that has been tokenized and leveraged with a 20 percent annual interest rate that is paid out everyday. CoinFLEX claims it will be able to unfreeze withdrawals and restart platform operations as usual after selling the tokens for $47 million.
The rvUSD whitepaper states that the client who owes the firm will settle their obligations, which the firm will convert to USD Coin. According to the quantity and frequency of the repayments, holders of the rvUSD cryptocurrency will be able to transfer their tokens to USDC on a pro-rata basis. In the event that the customer does not settle their obligation within 15 months, CoinFLEX will use USDC on its balance sheet to purchase the remaining rvUSD.
The revelation is intriguing since it demonstrates to investors how innovative crypto projects can be when adjusting their balance sheets. Just a few days back, cryptocurrency financial service provider Celsius faced comparable issues that forced it to halt its own withdrawals.
