Today I found the opportunity to examine the fragment ico project. I can say that there is a serious rival against Tether. Today, the major disadvantage of all cryptocurrency, including bitcoin, is the huge changes in volatilities. This project is a nice project developed to solve this problem.
When we look at their whitepaper, they label themselves like this: Fragments is an algorithmic reserve and monetary supply policy for creating low volatility Ethereum Standard tokens, and our mission is to produce a fair and stable money for the world. The protocol offers downside protection using a dynamic reserve, while maintaining upside interest through currency splits. Their first token will be the USD Fragment, a cryptocurrency targeted to the US dollar. At a high level the Fragments protocol stabilizes price by moving volatility from unit price to unit count. To stabilize purchasing power, they increase and decrease supply in response to demand.
Fragments are aimed at creating a version of classical money that works on blockchain. A theoretical solution to the conflict between short-term and long-term objectives when creating a world reserve currency. As a result, currencies adopting the Fragments protocol can store both near and long term value, making them suitable for both spending and holding.
How will this project do it?
Unlike typical inflation policies, when the Fragments protocol increases supply in response to demand, it automatically distributes new supply to coin holders to balance the change in price. Fragments is they will move in a manner uncorrelated with major coins. When floating price currencies dip, traders retreat into stable currencies. When floating price currencies dip, traders retreat into stable currencies. In our case, this demand pressure triggers an increase in supply that is maximally distributed to coin-holders as a byproduct of stabilization.
What are the tools they will use to do this?
Wallets: Wallets hold price targeted tokens. When supply increases in response to demand, the number of tokens in a given wallet increases relative to the wallet balance.
Fragments Reserve Buffer: The Fragments Reserve Buffer is an ETH reserve designed to programmatically participate in contraction. When supply needs to increase in response to demand, a fraction of tokens are allocated to the reserve and automatically sold for ETH to capitalize the buffer. When supply needs to decrease in response to demand, the reserve programmatically bids on bonds to remove supply.
Fragments Foundation: The Fragments Foundation is an allocation dedicated to the continued operational maintenance and technical development of the platform. When supply needs to increase in response to demand, a fraction of newly minted tokens are allocated to the foundation.
Fortunately, one of the key advantages of knowing a price target is that corrections can occur very quickly, and some of this trading can even be automated. The Fragments foundation will participate as a market maker alongside others.
The Fragments protocol is currently designed to hold ETH as its collateral asset, but we could also employ other assets.
DAI is a price stable ERC20 token. It has been successful in maintaining a peg to date, but at a relatively small market cap and it’s not yet clear how well it will perform at higher market caps.
Summary:
USD Fragments can serve as a medium of exchange, a hedge against other cryptocurrencies, and a service for utility token developers.
The Fragments protocol is an algorithmic monetary supply policy and reserve. Its goal is to produce low volatility currencies that can function as both near and long term stores of value.
When the protocol needs to decrease supply, the reserve automatically purchases tokens and removes them from supply in exchange for bonds, which are first in line to recapitalize the reserve under expansion.
The Fragments reserve holds ETH in a dynamic buffer to programmatically purchase tokens and remove them from supply in exchange for USD Fragment Bonds when contraction is necessary.
Maincite: https://www.fragments.org/protocol/
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