A reserve is created from part of staking rewards.
Then user may choose to use special transaction type called StablePay. Its purpose is to transfer value expressed in fiat currency.
Fixed consensus rules automatically increase and decrease count of coins per transaction.
In response to the exchange rate to peg coin price to SDR.
At selling point, when coins are trading for less than purchased SDR rate,
When coins are trading for more than purchased SDR rate,
Number of coins are decreased algorithmically until transaction value is equal to original purchase price. This is called a “transaction downsizing.”
To safeguard from a complete collapse of the economy,
We have set a floor on extreme volatility. This way, it will perform as stablecoin 99.89% of the time which is much better than 0% of the time as other cryptocurrencies yet remains a free floating cryptocurrency during normal times. We have not set a ceiling on extreme volatility. This is because upside for the reserve will ultimately lead to sustainability for Xank.
In a nutshell,
If the price decreases during transaction time then all the loss is refunded from the self-funding, self-governing reserve. If the price increases then the receiver receives fewer coins, but their fiat equivalent is still equal to that sent by the sender, and the difference is paid into the reserve. We are using SDR peg only during buy, sell, and settlement period that we call a “transaction lifecycle” and let supply and demand take over during other times making us the only stablecoin that has real investment value.
In the long run, when people use coins to purchase goods and services, the system can peg to a consumer price index (CPI) by uploading the price of a basket of goods instead of the coin to SDR change rate to the blockchain. We believe that IMF SDR which is a basket of world’s major currencies such as USD, EUR, RMB, JPY, and GBP peg is inherently more stable than just a single fiat currency peg alone. However, we peg to SDR only in the short run as a bootstrapping mechanism. In the long run, we shift the peg to a CPI, eliminating dependence on fiat currency while maintaining stability, usability, and sustainability.