❓ [Analysis] The Quest for a Stable Coin – Albert Wenger

Relative to what is a stable coin stable?

• The most desirable peg would be some kind of purchasing power index
• A global currency basket is a less ideal but functional option too

If a coin were to be stable, do supply and demand become meaningless? Is that good or bad?

• Prematurely stabilizing a coin could destroy the entire incentive effect for building out capacity
• Built-in inflation is an option to keep speculative demand at bay

How in the world does one create a stable coin?

• As new stable coins will start out small, they could all be attacked
• A potential mechanism is to randomly select coins for deletion and for duplication