I'm torn between writing and not writing to this website. Explaining our work, understanding by the readers and the product development process seems very long and tiring. But there is a respectable community here. That's why I want to talk.
Every developer aims to use their product in the real world. The product we produce is money. In the real world, money has 3 different structures.
Targeting Inflation (Gold, BTC)
Price Targeting-Fixed Price (CNY, USDT)
Floating Exchange Rate ( USD, ?)
The coins produced to this day were based on gold standards and fixed exchange rates. A currency targeting a floating exchange rate was not produced. So how is this possible? first by calculating the CC demand correctly. It is possible with an accurate demand measurement and a correct supply policy. so what is base cc demand?
Low demand, high supply; falling price action
High demand, high supply; fixed price action
Low demand, low supply; fixed price action
High demand, low supply; rising price action
So what we can't control is demand or supply? What cannot be controlled in the real world is governments' desire to print money. uncontrollable in a blockchain is demand. Therefore, there is a supply constant. The supply is always constant, whether the demand is low or high. Therefore, prices are affected by S&P. Whereas a currency should have its own index. The simple way to do this is to calculate base CC demand and produce with this context.
Why is this issue important?
-Producing y supply in x demand environment, 2y supply in 2x demand environment, 0.5y supply in 0.5x demand environment means trying to keep the price constant. Price action has low volatility. Low volatility and high liquidity can act together. This framework can bring Price stability without any peg. Or more stable than all products produced to date (except pegs)
- It can be used as an alternative to stablecoin. There is no peg that can break. Pegs are hard to make. Even England could not hold the pound-mark peg and it was devalued.
-There won't be any pegs. Therefore, it will not have any monetary policy to which it depends. Currencies such as usdt usdc are tied to the USD monetary policy. Fixed exchange rate regimes work with dependent monetary policy-free capital movement-fixed exchange rate triangle.
-There is no crypto currency produced with this idea. It will be fun to experience whether it works or not.
I worked on this idea for a very long time. I have pages of notes, writings and calculations. I want to produce BC that works with this idea. This is my biggest excitement.
If CBDCs are produced one day, I am sure they will follow this path. If this ecosystem takes the first step; Steering CBDCs can be easy. If CBDC is produced one day, cryptocurrencies may succumb.
