In our previous post, we took a ride through history to arrive at the present day, where we unabashedly labeled Xank “the Ideal Money”. Now that’s a bold statement. But today, we have yet another seemingly strange representation of Xank. In this story, we call Xank the Unstable “Stablecoin”. Paradoxical, you say? Let’s jump in and find out why Xank is in fact an unstable stablecoin.
To put it simply, Xank is a free-floating cryptocurrency with stable transactions and investment value.
Let’s break this statement apart piece by piece. Xank is a free-floating cryptocurrency because its price freely fluctuates in the way Bitcoin, Ethereum, and other non-stable cryptocurrencies do. Xank’s price can be $1 if the market says so, but it can also hit $1,000 if demand skyrockets. Therefore, since Xank’s price goes up and down, it has investment value. People can hold Xank with the hope of future price gain.
However, Xank can function as a stablecoin with its optional stable transactions function (hence the paradox). We call Xank’s stable transaction mechanism Stable Pay, which can be activated whenever you wish to retain a fiat value in a transaction. You can also send Xank tokens without Stable Pay, meaning you can send Xank coins that freely fluctuate in fiat value. Here are a series of illustrations to help you better understand the concept.
A Normal Transaction (without Stable Pay)
Alice sends Bob 10 Xank coins, which are valued at $10 when she sends him the coins.
On the day of the transaction, Bob has 10 Xanks at $10 per coin, which in total are worth $100.
On the tenth day, Bob is still holding the 10 Xank coins he received from Alice. Due to a spike in demand, the price of 1 Xank coin is now $20. Now Bob’s Xank coins are worth $200. With normal transactions, the coins are sent without activating Stable Pay, and Bob holds a total of $200 in Xank coins.
Now, let’s look at Xank’s unique Stable Pay mechanism.
Stable Pay Scenario 1
Xank Price Increase
Alice sends Bob 10 Xank coins at $10 per coin using Xank’s Stable Pay feature. This means that the total value of $100 will be maintained throughout the lifetime of the transaction.
On day 10, the price of 1 Xank coin has gone up to $20. Now, Bob has 10 Xank coins at $20 per coin, and a total of $200. But remember, Alice sent Bob the Xank coins via Stable Pay, which means the fiat value must be fixed at $100, regardless of the price increase. Enter the Xank Reserve, an autonomous reserve fund that acts as a stabilizing mechanism. The Xank Reserve can transfer coins to Bob’s address or take coins away from Bob to maintain the desired fiat value as defined by the sender. In this case, it is $100.
Thus, in a price increase scenario, 5 Xank coins from Bob’s address are transferred to the Xank Reserve.
Now, Bob has 5 Xank coins left in his address, each coin worth $20, and his Xank portfolio is now worth $100, just as Alice wanted it to be. The 5 Xank coins are safe with the Xank Reserve, which will handle other Stable Pay transactions within the Xank ecosystem.
Stable Pay Scenario 2
Xank Price Decrease
Let’s consider another scenario where Alice sends Bob 10 Xank coins, each coin priced at $10. Thinking about it, Alice sure is a generous person to send Bob so many coins.
Unlike the first Stable Pay scenario, Xank’s price has fallen by 50% on the tenth day. Each Xank coin sits at $5, and Bob’s total portfolio is now $50. Here again, since Alice activated the Stable Pay function, the fiat value must be kept at $100. The Xank Reserve comes to the rescue again, transferring 10 Xank coins to Bob’s address to maintain a balance of $100.
Now, Bob has 20 Xank coins at $5 per coin, but the total value remains the same at $100. The Xank Reserve has 10 fewer Xank coins after moving them to Bob’s possession.
Again, Xank is a free-floating cryptocurrency with stable transactions and investment value, as Alice and Bob have kindly acted out for us. We hope our illustrations have assisted you in understanding why Xank is an unstable “stablecoin”. We have many more riveting stories about Xank coming up, so follow our channel and visit our website for more information!