FPI is a stablecoin pegged to the Consumer Price Index (CPI).
FPI uses the unadjusted 12 month inflation rate reported by the Fed and uses a chainlink oracle that commits this data on chain immediately after its release.
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THIS IS A MASSIVE UNLOCK
$FPI is basically an index of consumer goods
Instead of measuring value against a “stable” USD...
We can measure value against an indexed basket of goods (like CPI for $FPI)
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This is the first step towards pricing objects against indices of all kinds.
Imagine a stablecoin pegged to the S&P that could fight inflation
Imagine paying rent denominated in FPI in order to counteract inflation
$RAI is a @MakerDAO / $DAI fork but was made to be as decentralized as possible using ONLY ETH as collateral with a free-floating peg
The peg began at $3.14 (currently hovers between $2.85 and $3.00)
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$RAI is debt-based and algorithmic - minted by leveraging against $ETH.
$RAI uses a “Money God” PID controller algorithm which uses a proportional term (P), an integral term (I) and a derivative term (D) to maintain price stability
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As a free-float currency, RAI fluctuates based on factors such as the re-demption price of RAI vs the market price of RAI
RAI uses a series of economic tools (IE positive/negative interest rates) in order to incentivize or de-centivize users from minting $RAI.
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The RAI price is more based on supply/demand for the asset (while being hampered by demand for ETH leverage - the only way to create RAI) than other fiat stablecoins which are based on the price or value of fiat dollars
While OHM began as a way to raise protocol owned liquidity, what they’ve done with that liquidity has been interesting
$OHM is a community-owned, decentralized, and censorship resistant reserve currency backed by crypto reserves
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OHM works similar to central banks
Olympus uses the treasury of crypto assets to back all OHM tokens
The protocol then uses a mint/burn function when OHM is above/below backing in order to stabilize the price of $OHM.
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This allows $OHM to maintain a relatively stable floating value
$OHM is then able to:
- Preserve purchasing power
- Acquire deep liquidity
- Become a stable unit of account
- With a relatively low risk (due to the diversity of backing)
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OHM attempts to solve the stablecoin peg issue by creating a reserve currency system (similar to Frax) with a more open peg value to counteract the lack of stability of the US Dollar
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4. $DAI
While $DAI is currently hard pegged to $1, $DAI was actually originally designed to be a free-floating currency
But after Black Thursday when the DAI peg went up to $1.10, MakerDAO introduced the peg stability module (PSM) to keep DAI hard pegged to $1
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Recently, MakerDAO co-founder @RuneKek has been proposing to go back to a free floating DAI and even submitted a Maker governance proposal for it.
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@RuneKek The thesis is to accumulate as much ETH as possible over the next 3 years in order to eliminate "seizable" assets from MakerDAO’s backing making it more uncensorable with less attack surface
While $BEAN attempts to peg to $1 USD, it is NOT hard-pegged. It can move above/below peg for extended times based on the supply/demand of the depositors, lenders, arbers etc
A reasonable debt level and consistent credit history attracts creditors and helps $BEAN scale
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Current iterations of fiat stablecoins are not solving for many of the issues with currencies we see. De-valuation, closed door monetary policies, supply/price inflation etc.
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The solve for these issues are currencies not tied a specific price or asset but rather what the market believes they are worth
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These are fascinating economic experiments and will unlock the true value of “money” as a medium of value transfer.
If our dollars aren’t doing their job - we now have the unique ability to opt out and use dollars more suited to our individual personal values.
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That's a wrap!
If you're picking up the stables im putting down:
1. Follow me @Ishanb22 for more of these 2. RT the tweet below to share this thread!