Switzerland-based company, Saga Foundation, has announced its new digital currency, Saga (SGA) today. The new coin is preparing to solve three important problems faced by crypto users: regulation, volatility and user identity. With a team of trusted professionals and famous advisors behind it, Saga has already raised $30 million from investors without an ICO.
What Is Saga?
While Satoshi Nakamoto invented Bitcoin with the hopes of replacing traditional monetary methods with a decentralized and democratic approach, Saga plans to do the opposite. The official website reminds users that they can’t use digital currencies because countries refuse to regulate them. So, their tokens follow the patterns of real currencies by keeping a reserve ratio, which will directly affect SGA’s value in banks. To avoid price volatility similar to that of BTC and other cryptocurrencies, SGA follows a simple formula: a high reserve value with a small economy will decrease the price of the token, and a low reserve value with a big economy will increase the price.
Simply put, the graph shows an inverse relationship between reserve ratio and SGA price. All of this will be achieved by Saga’s smart contract – increasing economy will lead to higher demand, which would then increase token supply, and vice versa. According to the website, “The smart contract generates and burns tokens as ETH is sent and withdrawn from it.”
Why Is User Identity Non-Anonymous?
In order to buy or sell SGA, users will need to verify their identity and give their personal details to the bank. However, employing a KYC policy strips users from of one thing favored by the crypto community: remaining anonymous.
Speaking on customer verification, JPMorgan Chase International Chairman and former Governor of the Bank of Israel, Dr. Jacob A. Frenkel, told Financial Times, “While Blockchain technologies have gained growing acceptance, encryptic currencies have raised public policy concerns, since they are anonymous, unbacked, and are highly volatile. I share these concerns and see great value in Saga’s vision to address them properly.”
An Anti-Money Laundering (ALM) policy will also present a safe and healthy environment for SGA holders. Ido Sadeh Man, founder and foundation council President, said, “We are targeting people who are holding digital currencies and looking for safe harbours from the raging volatility.”
How Did the Team Raise Funds Without an ICO?
Saga chose to avoid public and private sales, and instead approached ‘accredited’ investors to look into the project. Some of the investors listed on the website include Mangrove Capital Partners, Lightspeed and iCapital.
Interestingly, investors will receive Saga Genesis (SGN) tokens, which can be converted to SGA tokens. Smaller economy and a higher reserve ratio will result in an increased risk, which will make SGA more valuable then SGN. However, once the company is able to succeed, risk will become low and SGN will be significantly higher than SGA. In Sadeh’s words, “We are not aiming for Saga to replace any national fiat currencies, but to be a complementary global currency.”
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Do you agree with Saga’s non-anonymous strategy? Let us know in the comments section below.