Stable Cryptocurrencies - First Order Principles

Stanford Journal of Blockchain Law & Policy (2019)

30 Pages Posted: 19 Jun 2019 Last revised: 2 Sep 2019

See all articles by Craig Calcaterra

Craig Calcaterra

Department of Mathematics, Metropolitan State University

Wulf A. Kaal

University of St. Thomas, Minnesota - School of Law

Vadhindran K. Rao

Metropolitan State University

Date Written: June 11, 2019

Abstract

The emergence and proliferation of stable cryptocurrencies necessitate the establishment of first order design principles for stable cryptocurrencies. After highlighting the benefits of stable cryptocurrencies for monetary policy making, overall market stability, and their impact on the emergence of decentralized commerce, the authors introduce First Order Principles for stable cryptocurrency design and their essential functions. The core design features and their interoperative feedback effects revolve around: (1) burning coins through bonds vs. reserves, (2) transaction vs. holding taxes, (3) repegging, and (4) governance.

Keywords: table Cryptocurrencies, Liquidity, Corruption, Cost, Speculation, Inflation, Price Stability, Transparency, Feedback Effects, Market Stability, Stability Mechanisms, Monetary Policy, Emerging Technology, Crypto Economics, Token Models, Incentive Design, Velocity, Supply, Demand, Tokens, Blockchain,

JEL Classification: K20, K23, K32, L43, L5, O31, O3

Suggested Citation

Calcaterra, Craig and Kaal, Wulf A. and Rao, Vadhindran K., Stable Cryptocurrencies - First Order Principles (June 11, 2019). Stanford Journal of Blockchain Law & Policy (2019). Available at SSRN: https://ssrn.com/abstract=3402701 or http://dx.doi.org/10.2139/ssrn.3402701

Craig Calcaterra

Department of Mathematics, Metropolitan State University ( email )

700 East Seventh Street
St. Paul, MN 55106
United States

Wulf A. Kaal (Contact Author)

University of St. Thomas, Minnesota - School of Law ( email )

MSL 400, 1000 La Salle Avenue
Minneapolis, MN Minnesota 55403-2005
United States

Vadhindran K. Rao

Metropolitan State University ( email )

700 East Seventh Street
St. Paul, MN 55106
United States

HOME PAGE: http://www.metrostate.edu

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