I really do not still understand how this is going to be a stable coin not affected by inflation. Is there a video to demonstrate this function. If the market rules, then how do you intend to regulate the price. Or am i missing the point?
All good questions. Thank you.
The three elements are:
(1)
Stability: this is achieved through diversification across multiple currencies (a basket of currencies is more stable than single currency) and investment in a (relatively) stable asset class - cash and fixed income.
(2)
Not affected by inflation: the fixed income investments will target a return in line with inflation (average of G10 inflation) - i..e 2-3% p.a. So the value of the net assets grow at the same rate of inflation.
(3)
Price regulation: the price of the coin (freely traded on exchanges etc) is underpinned by the value of the net assets held by the issuer (Arc Fiduciary Ltd). There are three scenarios:
(i) Price per Coin = net asset value ("NAV") per Coin. No action required
(ii) Price per Coin > NAV per Coin.
- Anyone can request minting of new coins at a price equal to NAV per Coin
- Purchasers can then sell at a profit where Price > NAV
- Price reduces to NAV
(iii) Price per Coin < NAV per Coin
- Arc Fiduciary retains a portion of NAV in cash, available for repurchasing Arc Coin at a price close to NAV, supporting the price of Arc
- Any repurchased coins are ‘burned’ – profit is shared across remaining coin holders
- Under sustained price pressure, repurchasing becomes more profitable, increasing NAV per Coin (“natural buoyancy”)
Please note - the NAV per Coin is publicly displayed, updated in real time, and audited. So there is complete transparency in the system.
For a quick intro, you may like to see:
https://medium.com/arc-blog/q-a-introduction-to-arc-reserve-currency-in-1-000-words-49bea91c22ebThe detailed theory is set out in the documents attached at
www.arccy.orgPlease ask if any of this is unclear, or you would like further details.
