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How VNX Fiat-Referenced Tokens Are Born: A Journey from Gold to Fiat
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VNX fiat-referenced tokens (FRTs), are multichain tokens referencing fiat, which at the time of issue have gold as a reserve, which may be later replaced by other reserves (such as bank deposits) . The assets held in reserve serve as a safety net, ensuring that fiat-referenced tokens remain stable surviving as a safe-haven in the volatile crypto market.
VNX fiat-referenced tokens are generated on the basis of VNX Gold (VNXAU) which then can be replaced with an equivalent amount of other assets, such as fiat currencies held in bank deposits. So, for every token out there at all times, VNX maintains an equivalent reserve securely stored.
In a nutshell the process looks as follows:
1. User request: A user (who has signed the FRT Minting Agreement for FRT generation) requests to generate fiat-referenced tokens and provides VNX Gold to create the reserve;
2. FRT generation: VNX generates fiat-referenced tokens based on these reserves and transfers tokens to the user’s account on the platform;
3. Reserve management: VNX replaces VNX Gold with the FRT referenced fiat currency (either Euro or Swiss Franc), held securely in bank deposits.
The reserves are kept in the banks of Liechtenstein and Switzerland – the guardians of financial stability. VNX collaborates with leading European financial institutions, including: Bank Frick, Sygnum Bank, and Maekri Baumann, which ensure the security, availability and reliability of these reserves.
For complete transparency, the reserves are regularly reviewed by independent auditors. Information about the reserves as well as the latest audit reports is publicly available at the Transparency page.
If you’d like to delve deeper into VNX fiat-referenced tokens and their reserves, visit our FAQ section dedicated to fiat-referenced tokens.
