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first, it’s backed by a number of other cryptocurrencies, so that mitigates the risk of any one reserve currency tanking somewhat. Second, in the event that the
by impostervt 9y ago
first, it’s backed by a number of other cryptocurrencies, so that mitigates the risk of any one reserve currency tanking somewhat.
Second, in the event that the reserve is worth less than the number of Unum issued, a reserve deficit sell penalty is applied to any sales. The penalty is 1/10th of the deficit percent. So if the reserve was worth $900k, but 1mil Unum we’re in circulation, there would be a deficit of 10%, and any sales would incur a 1% sale penalty. This is meant to encourage would-be sellers to either wait, or sell elsewhere.
- Finnucane 9y agoIf you want to maintain dollar parity, wouldn’t it be easier to use Treasury bonds? Dollar parity would be garaunteed by definition.
- gus_massa 9y agoCryptocoins are strongly correlated, if one of the big ones goes down there is a high chance that most of them are going down. The penalty will not protect the coin from a "bank run". The user must choose between getting the money now with a 1% cut, or waiting and extracting the money with a 2% cut, ..., or waiting until there is no money left.