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FAQS

NUM Finance is a project that aims to create stable cryptocurrencies that track the value of emerging market currencies. These cryptocurrencies are called Num Stablecoins.

 

Currently, there are several stablecoins in the crypto assets market. However, most of them follow the price of the currencies of developed nations. The most well-known examples are the stablecoins that track the U.S. dollar, such as USDT, USDC, DAI, etc. 

 

The existence of these tokens was fundamental to the development of the decentralized finance ecosystem that thrives today on the main blockchains. Activity in decentralized finance protocols is growing in parallel with the circulation of these stablecoins.  While there are other stablecoins that track the price of other currencies from developed countries, there are very few from emerging economies or Latin American markets.

 

Num Finance seeks to facilitate access to cryptocurrencies and decentralized finance to millions of people and companies in emerging countries through the creation and promotion of Num Stablecoins.

 

It is precisely in these countries, where monetary problems such as inflation, capital controls, lack of access to credit and complex financial products abound; where decentralized finance can have the greatest impact on the lives of citizens and the economic activity of companies. With Num Stablecoins and the growth of their adoption, Num Finance seeks to strengthen local currencies by adding a product that can be used by market players in a completely open way. 


Num Finance was created during the year 2021. One of the developers of the Num Finance idea is Mariano di Pietrantonio, current Co-Founder & Head of Strategy at Maker Growth, and who was previously part of the team at MakerDAO, the issuing institution of the decentralized stablecoin DAI. In 2021, Num Finance launched its first stablecoin: the Num ARS (nuARS), which tracks the Argentine peso.

Num Stablecoins are centrally minted and issued by Num Finance. 

 

The act of minting consists in the execution of the function “minting” of the smart contract of the corresponding token. The Num Stablecoins minted can only be issued through the mechanisms that will be described in this section. 

 

Unlike other stablecoins, Num Stablecoins will have a hybrid collateralization system: they can be issued with the backing of other cryptocurrencies, fiat money and other assets. In a first instance, Num Stablecoins are going to be issued only through collateralization in other cryptocurrencies. 

 

The Num Stablecoins issuance with cryptocurrency collateral is done through the collateralized loan mechanism. For this purpose, a partner, previously approved and verified by Num Finance, must request the loan and transfer the corresponding collateral to Num Finance. In order to value the collateral, Num Finance will use as a reference the exchange rate of the most liquid pool that is active between the Num Stablecoin and a stablecoin that mirrors the U.S. dollar.

 

Furthermore, Num Finance reserves the right to apply an assessment on the value of the collateral and to charge interest in Num Stablecoins for the mentioned loan. In the event of an increase in the value of the collateral, Num Finance may only issue additional Num Stablecoins in favor of the partner providing the respective collateral in the form of a new loan. 

 

The issuance of Num Stablecoins with fiat currency collateral will occur through different Fiduciary Issue and Redemption Module (MERF for its siglas in spanish) for each Num Stablecoin. MERF will be activated at launch or in the months subsequent to the launch of each Num Stablecoin. The MERF will allow Num Finance partners to issue Num Stablecoins by transferring local fiat currency to Num Finance (or whoever Num Finance instructs) and, conversely, redeem Num Stablecoins by obtaining fiat currency in exchange. MERF will operate similarly to Maker DAO's Price Stability Module (PSM) and will contribute to the stability and security of each Num Stablecoin. For more information, please consult:

 

The issued Num Stablecoins will be withdrawn from circulation in the opposite procedure to the one described above for subsequent burning. In the case of a loan with collateral, the Num Stablecoins returned by the partner will be withdrawn from circulation by Num in order to proceed with the refund of the collateral.


In the future, Num Finance will seek to implement other issuance mechanisms that respect the collateralization and parity principles with the objective of increasing access to NUM Stablecoins openly and transparently.

For operational and security reasons, Num Finance will mint Num Stablecoins only to its own wallets. Num Stablecoins minted will not be issued, until they are backed by one of the mechanisms described in section. This will generate the existence of Num Stablecoins under the condition of "minted but not issued". Num Finance will publish the addresses storing these Num Stablecoins for public knowledge.

Num Stablecoins will initially be built on the Binance Smart Chain, Polygon and/or Ethereum blockchains. The launch of each NUM Stablecoin will be on a single blockchain to leverage network effects and concentrate liquidity.

NUM Stablecoins will seek to track the value of a particular currency. For example, the Num MXN token (nuMXN) will seek to track the value of the Mexican peso, and the Num ARS token (nuARS) will seek to track the value of the Argentine peso. 

 

Being issued against collateral valued at market value and against the national currency in question, Num Stablecoins will naturally tend to track the reference value. However, Num Finance does not guarantee that the market value of any Num Stablecoins will, at all times, be equal to the reference fiat currency.

 

Num Finance is under the obligation to return the corresponding collateral of the issuance through loans when the partner refunds the amount borrowed in Num Stablecoins and to keep in custody the fiduciary money backing the issuance made through this second mechanism.

 

Num Finance reserves the authority to implement and improve these and other automatic stabilization mechanisms to increase the intended parity of each Num Stablecoin.

Currently the only Num Stablecoin in circulation is the nuARS, on the Binance Smart Chain blockchain (contract address: 0x91bc956f064d755db2e4efe839ef0131e0b07e28).

Many currencies from emerging countries are often unattractive as a store of value. This raises intrigue about the usability of any stablecoin that seeks to track the price of any of those currencies. However, these currencies still remain the principal medium of exchange and unit of account in the economies of these countries. 


In such economies, individuals and businesses receive income, pay expenses and plan their projects in local currency, among other activities. In this context, Num Stablecoins have many applications for integration into the daily lives of economic agents. Decentralized finance and person-to-person transactions are the main use cases.

Num Finance is funded by private capital. Num Finance does not have any governance tokens and only issues Num Stablecoins. Each Num Stablecoin launched will be announced on our official communication channels.

To provide liquidity, depth and benchmark pricing to the Num Stablecoins market, Num Finance believes it is critical to have liquidity pools for pairs between different Num Stablecoins and some stablecoin tracking the US dollar on the major decentralized exchanges of each blockchain on which Num Stablecoins are deployed. 

 

For this purpose, Num Finance designed the Liquidity Provider Partnership scheme. Under this model, Num Finance and a partner, which we will call Liquidity Provider, sign a contract in which the parties agree to contribute assets to this pool for a certain period of time. Num Finance will provide the Num Stablecoins and the Liquidity Provider will provide the U.S. dollar stablecoins. This liquidity contribution will be made from a virtual wallet owned by the partner (making it a creditor of 100% of the trading fees as an incentive to contribute liquidity) but controlled by both parties. Upon expiration of the term, the partner must return the Num Stablecoins provided by Num Finance for subsequent burning.


Num Finance and its partners will be able to transact in this pool and Num Finance will be able to mint, issue and burn Num Stablecoins for trading in this pool in order to guarantee the parity of the Num Stablecoin in question and to safeguard the U.S. dollar stablecoins provided by the partner. Num Finance will make available to the public an additional document with a more detailed explanation of this mechanism.

Num Finance will publish on a quarterly basis the evidence of funds backing the Num Stablecoins issued. It will also publish the addresses of the virtual wallets containing such funds so that the funds can be monitored in real time by the public. At the same time, the addresses containing Num Stablecoins minted but not issued will be published.

Num Finance's partners will be the only ones authorized to receive Num Stablecoins from Num Finance in the first stage. They must comply with Num Finance's compliance requirements.

This document is for informational purposes and may be freely distributed. It reflects information, opinions and plans of the Num Finance team. Num Finance may alter, modify and/or replace any information contained in this document at any time without notice.

 

Num Stablecoins are freely tradable. However, Num Finance does not guarantee that anyone acquiring Num Stablecoins on the secondary market will be able to exchange or sell them subsequently at the reference price of the local currency in question. Any person acquiring Num Stablecoins assumes risks inherent in the acquisition of cryptocurrencies.

 

Num Finance is committed only to its partners in private agreements. Any acquisition of Num Stablecoins outside of an agreement with Num Finance will not create any obligation for Num Finance.

For further information please download: “Project Documentation” – Num Finance
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