Extreme price volatility of BTC, ETH and other cryptocurrencies is one of the biggest barriers to widespread adoption that cryptocurrencies face today. Unlike fiat currencies, today’s cryptocurrencies do not have a central bank that implements monetary policy to keep purchasing power stable, meaning that changes in demand can induce massive fluctuations in price. If users cannot be sure that the purchasing power of their accounts will remain stable, they will never adopt a cryptocurrency as a medium of exchange over a price-stable alternative. Moreover, without price stability, it is difficult for credit, debt and derivatives markets to form on top of a cryptocurrency because every contract taking payments in the future must charge a large premium to factor in price risk. For example, imagine you received a salary of 10 ETH per month—if the price of ETH dropped, you might face difficulties in paying off your monthly bills.
The Orch Stable (Symbol: ORCS) protocol powered by truly decentralized unforkable realtime blockchain federation Orch Network accomplishes this by algorithmically adjusting the supply of ORCS tokens in response to changes in the following variables and vector:
- current transaction fee and hashrate of ORCS subprotocol;
- Periodic Game-theoretic Truth Game outcome on current ORCS exchange rate;
- External datafeed on CPI index;
- Current Coinship Index level of Coinship derivatives exchange running parallel as a subprotocol of Orch Network.
This implements a monetary policy similar to that executed by central banks around the world, except it’s much more robust, decentralized, protocol-enforced algorithm, without the need for direct human judgment. For this reason, ORCS can be classified as a non-collateralized non-sovereign high-velocity reserve asset that does not have any counter-party risks.
Please read the full whitepaper here: https://orcs.fund/static/docs/whitepaper.pdf