Reserve-Backed

Subtype

Definition: Currency tokens collateralized by green commodities or impact assets.

Description

These reserve-backed tokens, which maintain stability without being pegged to fiat currencies, derive their value from baskets of regenerative or low-carbon assets.

Example

$EARTH by SolarpunkDAO ties the issuance of its tokens directly to real-world assets held in reserve. These reserves—primarily climate-positive or natural capital assets—establish an unassailable baseline value for each $EARTH token, enforced via smart contract to ensure that the token's backing never depreciates.