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RE: A Stable-Coin That Gains 12% A Year.
That is interesting but a 12% inflation seems stupidly high. Governments here are 2%-3% inflation and trust me that is plenty that you feel it after just a few years. A high inflation rate of 12% a year would destroy the coin I feel.
Staking 100 coins and then 12 months later having 112 that hold the same value ?
But then again you never know till you try something, tons of theory and talk but until someone actually does it we wont ever know. Could be an interesting project.
I figure if Bitcoin can maintain a baseline of doubling in value every year then a stable-coin should easily be able to maintain 12%. Maybe that's just crazy talk, dun know.
Also, it doesn't have to be 12%. Ideally it would be a DAO where the interest rate and the liquidity window were determined through decentralized voting every month.
This is true at the moment the marketcaps are so small that there is always huge potential. I really like that 2nd idea of being voted on.
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Also, the collateral would also ideally be decentralized and backed by crypto instead of stable assets.
Who knows, maybe one day Bitcoin becomes this stable asset that gains value every year but doesn't have a lot of volatility... unfortunately, I think such a reality is unlikely because of the block reward halving... and if it does happen then it will be 20 or 30 years away.
anything could happen as we should know with how crazy bitcoin has been since it was created lol. The volatility I feel would be less the more money that comes in but also the fact the reward halving after this time around is not going to have as much of an impact on the supply coming out. 12.5 to 6.25 is a pretty big reduction but 6.25 to 3.125 per block I feel will have smaller impacts.
He's not talking about inflation. Inflation is the increase in the cost of goods comparatively to the currency. So they lose value every year. His coin would increase in value.
Is that not the same thing? It's like the government printing more money which is what devalues the current use u hold.
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No. He's talking about the money being worth more. When the government prints money, it makes all the money worth less.