Abstract

Nuzo introduces a novel, fully-collateralized stablecoin model designed to address the volatility and accessibility challenges prevalent in emerging markets. By leveraging USDC as collateral and a network of physical agents, Nuzo offers a stable, user-friendly, and global digital currency solution.

Introduction

Emerging markets often grapple with currency volatility, limited financial infrastructure, and high transaction costs. Digital currencies, particularly stablecoins, have the potential to mitigate these challenges. However, many existing stablecoin models, such as algorithmic ones, are susceptible to systemic risks and popular US dollar stablecoins aren’t useful for buying goods and services priced in local currency. Nuzo’s model, by contrast, prioritizes simplicity, usability, and security.

Model Design

Full Collateralization:

• Nuzo local currency stablecoins are 100% backed by USDC, ensuring a strong and reliable foundation.
• The issuance and redemption price of Nuzo stablecoins is calculated based on a 180-day trailing average of the USDC to local currency exchange rate within a 50 basis point maximum volatility band paired with a 100 basis point redemption fee.
• This mechanism provides stability by smoothing out short-term volatility and ensures reserves are sufficient to cater to extreme bank runs.

Implementation

Nuzo Wallet:

• A user-friendly mobile application that allows users to store, send, and receive Nuzo stablecoins.
• The wallet integrates with a network of physical agents, enabling seamless conversion between fiat and digital currencies.

Nuzo Agents:

• A network of physical retailers that serve as intermediaries between users and the digital currency ecosystem.
• Agents facilitate the onboarding of new users, provide customer support, and help with currency conversions. The Nuzo agent model replicates the success of mobile money solutions like Safaricom’s M-Pesa in Kenya.

Nuzo Reward Token (NRT):

• A utility token that incentivizes user engagement and rewards loyalty.
• NRT can be earned through various activities, such as using the Nuzo wallet, participating in games, and referring new users. NRT can be redeemed for Nuzo local currency or USD stablecoins or staked to earn yield.

Conclusion