Bitcoin introduced a purely peer-to-peer version of electronic cash which allows online payments to be sent from one party to another without going through a financial institution. Despite all of its advantages, predefined finite monetary supply inevitably leads to price volatility which makes Bitcoin suboptimal as a medium of exchange, store of value or unit of account. We propose a solution to the price stabilization problem using a decentralized currency unit which evolves from being collateral-backed to being regulated by an autonomous monetary policy as the network receives wider adoption.
The system defines a soft peg to any measurable unit of value with low-volatility purchase power, such as the US dollar of 2018, basket of currencies or CPI, which it maintains using a collateralized stabilization fund and if necessary expands and contracts available money supply via the issuing of bonds, share dilution and temporary parking of funds. Ownership of the network is distributed to shareholders who form a decentralized autonomous organization capable of changing some parameters of the system through a voting consensus mechanism. This creates a new type of crypto-asset which combines the advantages of Bitcoin with the predictable purchase power of the US dollar.