Can someone please explain the technical mechanism via which it is possible to enforce a 5% appreciation in a market? I watched the entire 90 minute video and saw very little technical info whatsoever.
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Can someone please explain the technical mechanism via which it is possible to enforce a 5% appreciation in a market? I watched the entire 90 minute video and saw very little technical info whatsoever.
By the same mechanism that enforces price stability of SmartCoins. The only difference is, while smartcoins track a price based on a realtime feed of what the assets they derive their value from (ie. USD for bitUSD) are worth, HERO uses a formula. HERO is pegged to the value of the USD + 5% APR since the 23rd of the December 1913 which gives it a current price of around $155 USD.
OK, this is the part I've been "told" several times:
"HERO is pegged to the value of the USD + 5% APR since the 23rd of the December 1913 which gives it a current price of around $155 USD."
Can you explain the mechanism by which a freely traded asset can be pegged? If you are saying it is built into the design, can I see the code for the inflation formula or minimum payout somewhere? Because otherwise, I don't see how it works.
Here is the link I already included in the comment you replied to, which contains the explanation of the mechanism that enforces price stability of SmartCoins. It is also prominently displayed at bitshares.org.
From your link:
"In all but the most extreme market conditions, SmartCoins are guaranteed to be worth at least their face value"
Ah, so in all situations except the exact situations you most need price stability, these have price stability.
Does that sentence not severely worry you?
I mean, this is a system that runs on forced settlement and we are seeing pretty regular flash crashes in Nasdaq, Ethererum, etc.
PS - Thanks for the link.