Capital efficiency is the ratio that compares the spending of a company on their growing revenue and how much they are receiving in return in the way of profits.
Innovations coming from blockchain-based finance are changing the way we maintain and improve capital efficiency. Stablecoins that are backed in two ways: collaterally-backed and algorithmically modified, don’t require full collateral backing, like Tether, because only a certain percentage of its supply is required to be collaterally backed. This means the asset requires fewer dollars to act as collateral, so that money can be put to more efficient use. For example, if a $1 peg can be maintained with only 85% of it backed by fiat stablecoins, you can be 15% more capital efficient.
Bio: Travis Moore is an angel investor, programmer, entrepreneur and the CTO of Frax, the world’s first fractional algorithmic stablecoin that is partially backed by collateral and stabilized algorithmically. Frax is open-source and permissionless, bringing a truly trustless, scalable and stable asset to the future of decentralized finance. Moore is also co-founder of the blockchain-based knowledge base, Everipedia. Moore has a triple-major from UCLA in Neuroscience, Biochemistry, and Molecular, Cell, & Developmental Biology. His passions are artificial intelligence and blockchain technology, which he believes are the two industries that will impact the world the most in the coming decade.
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