Radix pegged to $ or metals?

Discussion in 'General' started by Rad-voyage, Sep 13, 2017.

  1. Rad-voyage

    Rad-voyage Member

    I can understand for ease of explanation that being stable at $1 is easy to present.

    But it could be that fiat becomes less stable as they inflate and effects even if deflation occurs.

    Could we be different and use a pegged price based on an international asset?

    Either the silver price?

    Or a combination of silver - gold - platinum - palladium...

    The international community is pushing for a basket of currencies called the SDR.

    Maybe metal or a basket is a better peg than the USD??
     
  2. Fuserleer

    Fuserleer Radix Founder Staff Member

    I've got a ton to do this evening so will reply later on...just marking this thread :)
     
  3. Rad-voyage

    Rad-voyage Member

    ok great thanks.. becasue it can be argued that the dollar swings too much based around silver as the core commodity/asset/currency/value store..

    Do not let me interfere with your coding progress though :)
     
  4. lovely89

    lovely89 Beta Testers

    Until Dan replies, I recall it being mentioned that we won't be pegged to the dollar. We'll have a stable value against a basket of currencies, commodities and metals. If one currency runs away on inflation or deflation, the system will recognise this due to it's value fluctuating against the rest of the basket. The price will attempt to remain stable relative to the basket which could possibly mean doubling in one currency at a given time.
     
    Rickard likes this.
  5. Rad-voyage

    Rad-voyage Member

    Yes thanks for the reply - it works for me.

    It is an interesting model. That seems to reward the early bird but not too much and distributes the coin far and wide according to growth acceptance and demand.

    It is like a CCO a constant coin offering.. But the system members absorbs the coins not the initial dev team.

    The Dev team of course should be rewarded and financed for past and future efforts in coding and marketing.

    Is there a governance or treasury model in the system like perhaps offered in Dash?

    I would assume there is also a business model of selling and setting up private chains, consulting and actual real world applications using the platform for revenue sales and services also.
     
  6. Rickard

    Rickard Beta Testers

  7. Rad-voyage

    Rad-voyage Member

    Do i have the economics of Radix aligned correctly here in my thoughts?

    This is a rambling of my idea I'm sorry if it confuses anyone.

    Most other platforms have a regularly issued amount of coins resulting in a total of released coins or the total released on genesis.

    So a fixed supply either now or sooner or later..

    They can be graphed and priced by having their value in a market - the coin compared to another coin or asset.

    For Radix, a price is stable - compared to its peg.. So in ONE market the price is not up and down...

    Radix price compared to peg asset. ( I'm not sure what the peg is exactly)

    Radix=peg will fluctuate in price against all other coins and assets. eg btc eth gold USD etc

    -------------------

    So if there is a demand for Radix coins then in normal (other) markets the price will rise until the seller becomes available to meet the demanded price. Price will increase until there is a match and drop if not.

    But in Radix, if someone places an order to buy in the DEX - 1000 RAD...

    It will not force an increase in price for a match.

    People holding Radix can see the offer to buy the amount desired at that stable price.

    If someone wants to meet that demand at that stable price then a deal is done...

    A swap and no inflation.

    If no one offers to sell

    Then the system will create an amount of the coins and and will be passed to three parties.

    One is the buyer, second is the nodes operating, third is all accounts.

    So inflation of the coin supply due to an order of 1000 Rad =

    1000 Rad to buyer,

    **** question - what does he pay in? EUR? BTC? where does that payment go? ****

    So he received 1000 RAD

    Plus.

    a percentage is factored of 1000 RAD compared to the whole market RAD supply

    eg 1000 rad order.... 100,000 Rad market total = 1% increase in Rad supply

    But supply is increased 2%.... 1% 1000 RAD to the order maker who payed in and 1% 1000 RAD to ...

    50% of this goes to all node operators.. they share 500 evenly

    50% of this goes to all account holders based on their account balance, they share 500 unevenly.

    So two ways the individual can get an increased supply of RAD based on his amount and if he runs a node.

    Third way is if he buys more.... ( i still do not fully understand this part. Who is he paying what? )

    The inflation of the total supply will always out-pace an individual account.

    But becasue Rad is pegged he is gaining an increasing amount of this pegged coin...

    Total inflation goes up, each individual account percentage of total supply goes regularly down. Becasue each account holder gets an never ending increase due to his account balance and from running an node.

    Is this an idea of a dividend or classed as interest? Bonus?

    ----------------------------------------
    Sorry if i made this too simple or if i missed it completely.

    Please if i am wrong have a go at correcting the idea and fill in the holes in my examples.

    Also comment if i missed out on any aspect.

    I wonder how i will graph this - a fixed peg with constant increasing supply and even my holdings increase but becoming a less percentage of the whole.

    Also what is the peg?

    ( USD index? SDR rate? ) Plus ( Silver, Gold, Platinum, Palladium - metals index? ) Plus ( top 30 crypto index? )
     
  8. Rickard

    Rickard Beta Testers

    No, it will only go to nodes and accounts. This will increase the circulation of currency in the system, making it easier for the buyer to find a seller.

    There is no peg.
     
    Last edited: Sep 19, 2017
  9. Rickard

    Rickard Beta Testers

    Dan gave a relevant answer in a different thread:
    https://forum.radix.global/threads/radix-ico.4479/page-13#post-25571
     
  10. Ahmed

    Ahmed New Member

    I have a proposal regarding "the peg" and how "pegging" works
    Even if my proposal is not complete, it may/may not be a step forward to the optimal solution

    As you are always ambitious and try not only to reach the best available, but to create a better option even better than other available solutions, I will take this even further


    First, lemme choose the pig:
    In my opinion the best abvantage that every human would love in a currency is the "real" value of the currency to be stable, thus the amount of goods and services aa unit of the currency can purchase, and no currency ever could make that goal happen except (...)
    Let's have a look at the solutions you think of:
    - For USD, EUR, and other governmental currencies I think the very first purpose of a "Crypto Currency" is to avoid being linked to a "central issuing system" as every currency of those has suffered from inflation and even if theres is a system to avoid a currency if it suffered inflation, Radix will suffer from inflation over time as all fiat currencires does over time.
    - For BTC, LTC, and other CryptoCurrencies, the inflation problem is even worse because cryptocurrencies are far more volatile.
    - For Gold, Silver, and other precious metals, I this they're the best option because those metals do not suffer from inflation but rathar from deflation sometime which makes them the best option.

    So, I choose a basket of precious metals.
    Note that even if we choosed a basket of combined metals, fiat, and crypto, this will cause Radix to suffer from inflation over time because a lot of items in the basket suffers from it not only a minority.
    Also, as an important factor, things that can be produced in labs should be avoided (like Diamonds)


    Second, For the most important part, the pegging system:
    Unfortunately, the "peg" I have choosen does not support a decentralized exchange because it's not a "digital" asset, but rather a "real" asset, so how would someone place order with that "real" asset and where does that real asset goes?

    There comes my solution

    In order for a decentralized cryptocurrency exchange to work properly, it should support only "crypto currencies", so we'll use cryptocurrencies as a "medium" (as currencies) to determine the value of metals relative to Radix.


    To clarify what I mean and to make the picture complete imagine the following scenario:

    Assumptions:
    - The choosen currencies as a medium for exchange in the decentralized exchange are BTC, LTC, ETH, XRP, XMR, and DASH (note that supporting more cryptocurrencies should be a normal addition to Radix ecosystem to maintain stability and also removing support for a cryptocurrency)
    - The pigging price is 1 Radix = 1 gm of gold (should be a lot less than that (maybe 1 Radix = 0.001 gm of gold?) and also a weighted avarage of the basket not a single metal)
    Scenario:
    - Each participating user priodically issues a transaction claims the price of 1 gm of gold for one of the supported cryptocurrencies
    let's say BTC and 3 users set prices as:
    - User A: 1 gm of gold = 0.01 BTC (thus 1 Radix = 0.01 BTC at that particular time)
    - User B: 1 gm of gold = 0.02 BTC (thus 1 Radix = 0.02 BTC at that particular time)
    - User C: 1 gm of gold = 0.03 BTC (thus 1 Radix = 0.03 BTC at that particular time)
    - Price Claims transactions should be limited to a time cycle (lets say once hourly per cryptocurrency per user - or less of course if the participant didn't issue that transaction) to prevent system bloating (if there's other ways to prevent bloating it would be better to have more price claims per user for different times)
    - Those transactions have the regular timestamping like any other Radix transaction regarding to witnesses and so on to be able to determine the relative datetime of an order in the decentralized exchange relative to price claims transactions.
    - A checking system should all the time be checking for Radix buy orders that lasted for more than a give period of time (24 hours maybe?) and pick the highest buy price of those orders (with the medium cryptocurrency) lets say 0.02 BTC.
    - The checking system should calculate the fair price for 1 gm of gold using price claims transactions with using a predeined set of rules with weights that respect to the following:
    - The time those price claims transactions was made (the closest the transaction to the current time the higher the weight of the claimed price)
    - The reputation of the participant for each price claim transaction (the heigher the reputation the higher the weight of the the claimed price)
    - Radix balance of the participant to prevent sybil attacks.
    - Lets say the system determined that the weighted fair price of 1 gm of gold (1 Radix) is 0.018 BTC (at time of calculating)
    - The system then sees it's clear that the price for the order that is choosen (0.02 BTC / 1 gm of gold) is higher than (or equal) the fair price for 1 gm of gold and not filled for the predetermined period of time
    - The system should also calculate the fair price for the whole predetermined period of time and make sure the order lasted the whole period with a price higher than (or equal to) the fair price and not filled.
    (note that the price should be calculate for any point of time for example if participant A claimed the price is 0.01 BTC at time 3 and the price is 0.02 BTC at time 7, then the claimed price of participant A is 0.015 at time 5, and also there should be aformula to calculate the price claim at time 9 as a prediction where no claims exists for participant A because this will be usually the case for most participants because they are not issuing a price claim every second)
    - The system them issues the corresponding amount of Radix (let's say 1000) and only that amount should be issued not more because the system needed 1000 Radix that noone is willing to give away so the system issues 1000 Radix instead.
    - Now to the fun part, What happens to the corresponding BTC (20 BTC)?
    - Those 20 BTC should be distributed among the participants as an incentive ofr participating in price determination process (how? a rambling vision comming a few lines a way).
    - The amount each participant get of BTC should calculated with respect to the following:
    - The closest the price on every point in time in the whole predetermined period of time to the calulated fair price at that point of time.
    - The reputation of each participant
    - Radix balance of the participant to prevent sybil attacks.

    Third, How the (20 BTC) is distributed to participants:
    Depending on the decentralized exchange, the 20 BTC should be now licked in some Multisig BTC address (lets say 0xAA) holded until someone claims some of them.
    Let's assume the 20 BTC is distributed as the following:
    - Participant A: 12.5 BTC
    - Participant B: 5 BTC
    - Participant C: 2.5 BTC
    Let's also assume another 7.5 BTC is distibuted among the same participants for another trade locked in the address (0xBB):
    - Participant A: 2.5 BTC
    - Participant B: 2.5 BTC
    - Participant C: 2.5 BTC
    Those balances should be stored in the Radix system (atoms at the time of the trade?) as following:
    - Participant A: 15 BTC
    - Participant B: 7.5 BTC
    - Participant C: 5 BTC
    At any given time a participant (Participant A for example) can issue a transactionton claim his reward consuming the previous two atoms and requesting part of his balance (5 BTC) to be sent to his address (0xff) thus creating two new atoms 1 for 5 BTC to be sent to his address and 1 for 10 BTC to be consumed later
    - The system should now check the validity of his transaction and release the corrosponding balance from the locked addresses (0xAA, 0xBB) after subtracting the withdrawal fee



    Now I' not sure this is completely feasable or not ar it may be even a unapplicaple piece of crab, but I think it is at least a one more step forward if not the required solution.
     
  11. Peachy

    Peachy Founders Staff Member

    Interesting concept and thanks for thinking outside the box, but there is currently no plan (or need) to institute pegging within the current solution.

    Pegging, as a general concept, is merely an attempt to smooth out the volatility by tying it to something known.

    Your pegging strategy looks similar to what BitShares employs already and effectively complicates what should be a fairly uncomplicated process: allow the free market to decide the right price per unit.
     

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