<figure class="wp-block-image size-large"><img width="325px" height="183px" srcSet="https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/09/11043035/USDL-is-a-Store-of-Value-375x211.webp 375w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/09/11043035/USDL-is-a-Store-of-Value-662x372.webp 662w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/09/11043035/USDL-is-a-Store-of-Value-768x432.webp 768w, https://d2ly46a6b1u3g6.cloudfront.net/wp-content/uploads/2023/09/11043035/USDL-is-a-Store-of-Value.webp 688w" sizes="(max-width: 425px) 150px, 450px" src="https://ll-blog-dev.s3.ap-southeast-2.amazonaws.com/wp-content/uploads/2023/09/11043035/USDL-is-a-Store-of-Value.webp" alt="USDL is a Store of Value" class="wp-image-3921"/></figure>



Before you say - “But USDL is pegged to 1 USD, how could it be a store of value?!”



Consider what backs <a href="https://www.thecoinzone.com/liquidloans/usdl-crypto" target="_blank" rel="noreferrer noopener">USDL</a>, as well as what you can do with it.



You’d be correct to say the US Dollar is depreciating rapidly and is accelerating towards zero … just like every fiat currency ever.



But, consider that although USDL is pegged to a dollar, it has properties which allow it to outperform a dollar (if you mint it yourself).



To understand what I am getting at, we have to first dissect what a store of value is.



<h2 class="wp-block-heading">What is a Store of Value?</h2>



A store of value is an economic term that refers to an asset or form of wealth that can be saved, stored, and exchanged for goods or services in the future while maintaining its value or even appreciating in value over time.



In essence, it is something that retains its <a href="https://www.thecoinzone.com/tradfi/purchasing-power-risk" target="_blank" rel="noreferrer noopener">purchasing power</a> over an extended period, protecting the wealth of its holder from the eroding effects of inflation or other economic factors.



<h2 class="wp-block-heading">Characteristics of a Store of Value</h2>



Stores of value, whether they are physical assets or financial instruments, share several key characteristics:



Stability of Value: A store of value should generally maintain its worth over time, protecting against the eroding effects of inflation or economic fluctuations.



Durability: Stores of value should be durable and able to withstand wear and tear, ensuring they retain their value over extended periods.



Scarcity: Limited supply or scarcity is often a characteristic of effective stores of value, as this scarcity contributes to their ability to maintain value.



Acceptability: A store of value is only useful if it is widely accepted and recognized as a medium of exchange or a means to preserve wealth.



Divisibility: Effective stores of value are often divisible into smaller units, allowing for flexibility in transactions and wealth preservation.



Portability: They should be relatively easy to transport or transfer, enabling individuals to move their wealth as needed.



Liquidity: Stores of value should have <a href="https://www.thecoinzone.com/defi/defi-liquidity" target="_blank" rel="noreferrer noopener">liquidity</a>, meaning they can be readily converted into cash or other assets without significant loss of value.



Historical Track Record: Many stores of value have a history of being reliable over time, which can instill confidence in their continued effectiveness.



Intrinsic Value: Some stores of value have intrinsic value, meaning they have inherent worth beyond their use as a store of value. For example, gold has industrial and aesthetic value in addition to being a store of value.



<h2 class="wp-block-heading">Traditional Stores of Value</h2>



Among others, these three assets are commonly considered to be stores of value:



Gold: A precious metal known for its durability and scarcity, making it a traditional store of value that retains its worth over time.



Real Estate. Real estate, such as residential or commercial properties, serves as a store of value by appreciating in value and providing rental income potential.



Treasury Bonds. Government-issued Treasury bonds are considered a secure store of value because they offer a fixed interest rate and are backed by the government&#x27;s credit.



<h2 class="wp-block-heading">How is USDL a Store of Value</h2>



USDL, when you mint it yourself, is a store of value because it meets many of the characteristics listed above. 



Stability of Value: <a href="https://www.thecoinzone.com/pulsechain/what-influences-the-price-and-supply-of-usdl/" data-wpil-monitor-id="1072">USDL is pegged to the price</a> of the US dollar. Therefore, it is protected against downside market volatility. However, it still is subject to a loss in purchasing power from inflation. This is where minting it yourself comes into play. If you mint USDL yourself, by definition you have <a href="https://www.thecoinzone.com/liquidloans/dont-dump-on-yourself-cash-out-with-liquid-loans/" data-wpil-monitor-id="1008">locked up PLS</a>. By holding PLS, you have price exposure to an asset which can appreciate in value in the face of inflation.



Durability: USDL is created by a battle-tested, carefully constructed, and <a href="https://www.thecoinzone.com/liquidloans/halborn-audit-company" target="_blank" rel="noreferrer noopener">heavily audited</a> protocol in Liquid Loans. It also exists on a fully-decentralized blockchain protocol in PulseChain.



Scarcity: USDL is backed by PLS which is the <a href="https://www.thecoinzone.com/blockchain/what-is-a-native-token" target="_blank" rel="noreferrer noopener">native token</a> of <a rel="noreferrer noopener" href="https://www.thecoinzone.com/pulsechain/pulsechain-official-guide" target="_blank">PulseChain</a> which has no inflation and small amounts of deflation with the elective burn function.



Acceptability/Liquidity: USDL and PLS are both featured on many decentralized exchanges with sufficient and growing liquidity across PulseChain. PLS is listed on several centralized exchanges and USDL will likely follow suit. USDL may also be available on <a href="https://www.thecoinzone.com/defi/crypto-debit-cards" target="_blank" rel="noreferrer noopener">debit cards</a> and accepted by merchants at some point in the future. 



Divisibility: USDL and PLS are both digital assets with infinite divisibility. 



Portability: USDL and PLS can both be brought all around the world and across borders with nothing but your seed phrase and an internet connection.



Historical Track Record: Although <a href="https://www.thecoinzone.com/liquidloans/why-real-estate-investors-understand-ll/" data-wpil-monitor-id="863">Liquid Loans</a> is very young, the cryptocurrency industry has been around for over a decade and is continuing to grow in influence. 



Productivity: When USDL is placed in the <a href="https://www.thecoinzone.com/liquidloans/stability-pool" target="_blank" rel="noreferrer noopener">Stability Pool</a>, its earn yield in both PLS and <a href="https://www.thecoinzone.com/pulsechain/loan-token-ultimate-guide" target="_blank" rel="noreferrer noopener">LOAN token</a>. The returns from the <a href="https://www.thecoinzone.com/defi/defi-yield-protocol/" data-wpil-monitor-id="364">Stability Pool</a> can help overcome or ameliorate the loss in purchasing power from inflation. 



<h2 class="wp-block-heading">The Bottom Line</h2>



Most people wouldn’t consider an algorithmic stablecoin pegged to a dollar to be a store of value. 



But when you dig deeper, you realize that when you mint USDL yourself, you keep price exposure to PulseChain, which can appreciate in the face of inflation.



In addition, you can provide stability with USDL and earn yield which can also offset inflation.



As cryptocurrency continues to grow, users may opt for alternative stores of value such as USDL to protect their hard earned money.

Stablecoins Under Siege: The SEC’s New Rules Aren’t What They Seem

How to Earn Yield While HODL'ing PLS

Bitcoin’s Rise: My View From the Trenches

Here's What Happens to LL Users When Prices Rise (Actual Numbers)

USDL is Actually a Store of Value (If You Mint It Yourself)

In this article, I make the case for why USDL is actually a store of value, and not a depreciating, blockchain fiat-currency. 