Do a Cryptocurrency require an underlying asset?

What is the function of the underlying asset and what is the right underlying asset?

The function of an underlying asset or a hedge generally is to mitigate the risk(s) involved in Crypto assets. It gives the Crypto assets, in general, a real intrinsic value to every coin you are buying.

Source: https://www.blockchainwg.eu/

Can it solve the volatility problems?

Well, you can never fully mitigate speculation and there are probably no limits to where hype can go. On the other way, there is also no absolute certainty as to when a hype can stop.

Does every coin have to be hedged to an underlying asset?

There are no clear regulations as to whether every coin has to be hedged with a real asset but in the long term it needs a real price to move forward as the future for a settlement system. Otherwise speculations will continue, as long as investors don’t know the real value of the assets they are holding. Mr. Lo Kheng Hong, who is deemed the Indonesia Warren Buffett commented he preferred stocks over bitcoin when asked why? He stated, “When I buy a stock, there is an underlying asset. There is a physical company, and we can see the company.”

Source: https://market.bisnis.com/

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Nagaya Technologies

Nagaya Technologies

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NAGAYA (NGY) is a Gold-Backed Cryptocurrency with Subsidiary Projects. We aim to build Trust and Value through LEGALITY and TRANSPARENCY. https://nagaya.co/