Stablecoin to HODL? Pizza CEO Nets Millions for Crypto

A fixed price coin whose value increases over time? Only in crypto.

Coming out of stealth mode Monday, crypto project Fragments is revealing that it has raised a $3 million venture round led by True Ventures, with additional participation by Pantera, FBG Capital, Founder Collective and Coinbase CEO Brian Armstrong.

Co-founded by Pythagoras Pizza founder Evan Kuo, the project was originally designed as a gig economy token but has since pivoted from that vision to one that addresses a fundamental problem in crypto: the need for a token that can easily trade in and out of government-backed currencies.

The big idea behind the project, as described in its documentation, is this: “At a high level, the Fragments protocol stabilizes price by moving volatility from unit price to unit count.”

But while that may sound complex, the idea is simple at heart.

When the price goes up, the protocol will automatically issue a new cryptocurrency called “fragments.” Some of those fragments will go to the wallets of existing users. So, a holder who bought one token and never sold would find more tokens in the wallet over time, even if they never made later purchases.

It’s worth noting that emissions won’t go solely to wallet holders, though. They will also go into two reserves, one that funds future development and another that buys ether, ethereum’s blockchain token, to have ready when supply needs to contract because prices are falling.

It’s natural to think that inflation and deflation tend to occur in equal measure, but Kuo noted that there’s no theoretical limit to how much a currency can be worth, but the value can’t go below zero.

And every time deflation gets triggered, holders come out ahead.

Venture interest

And because of this built-in incentive scheme, investors see the idea as one that could last.

Kuo explained that Fragments wanted a venture fund to lead its round in order to signal that the project is oriented around long-term thinking.

He told CoinDesk:

“In the crypto world, things tend to move faster. With a venture fund, they are really looking to be involved in a project for five to 10 years, ideally”

True Ventures partner Adam D’Augelli also spoke to this long-term vision, telling CoinDesk that he believes the project will open up new business opportunities in crypto over time.

“Evan brings a unique perspective to this problem, which is to be fair to all participants in the market and focus on long-term usability,” D’Augelli said…

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