There are essentially three currency types in the network and these will be described below:
XHV- This is Haven’s base currency and can be thought of as the network collateral. It is volatile in nature in that the price of 1 XHV is determined by the market supply and demand. It is the ONLY way that all other assets within the network can be created.
xUSD is the network gateway currency and is a synthetic representation of the US Dollar. Once you own XHV you can convert it to xUSD to provide a stable store of value or use that xUSD to create (mint) any other of the network’s supported assets such as xGOLD, xCNY etc.
xASSETS- All other assets in the network are known as xAssets and can only be created by converting xUSD. Virtually any asset could be added to the network, as long as the protocol is able to take a reliable, decentralised price feed then it can be supported.
So, the flow of capital within the Haven network is this:
XHV < > xUSD < > xASSETS
There are a couple of reasons to set the network up in this way:
- The US Dollar is the world’s reserve currency and is likely to remain so for the foreseeable future. It touches the vast majority of all global transactions and many commodities including Oil are priced in USD.
- Using a currency that the majority of people recognise and understand makes it easier for users to value their portfolio and calculate their exchange rates.
- It also simplifies parts of the codebase without having to rely on multiple exchange rates for any single transaction.