Revisiting Algorithmic Stablecoins Get Started With Terra

Previously, we learned what an “algorithmically stable currency support” would look like with AMPL. However, for now, the type of "security matters" is temporarily difficult to achieve in the human mind of the concept of security. Terra has always presented itself as a “financial chain”, at the heart of which is a powerful force of mutual interest. So, in order to revisit the concept of "computational stability", it is worth looking into modern stability calculators today.

What is Terra?

We must first be clear.Terra is a chain.In terms of technology, there aren't many technological changes as Terra itself uses Tendermint. From the point of view of the business model, the biggest change is also related to its own financial stability, since for the most part it is the “financial chain” which is often put in a stable financial situation. especially in my eyesIts innovation lies in the pursuit of a strategy that governs the safety of the entire industry, and more importantly, no matter how the industry evolves, the interests of miners are guaranteed for the long term.If the interests of the miners are recognized, the overall security and enjoyment of the partnership will improve, which will lead to better development of the entire ecosystem.

Therefore, we recommend that you use this project to examine key concepts of token mechanisms. For example, let's start by thinking about a few questions.

What are the stable results? What is the purpose of Stabilitycoins?

The reason why BTC cannot be used as a payment method is because its value fluctuates wildly. So why can't the exchange rate be changed depending on the payment method? This includes important issues that need to be addressed. What are Stablecoins and what are they used for? In the opinion of most people, the main role that a stable currency should keep is to ensure the security of its "value". 1 yuan is not 1 yuan today, but 1 yuan, 5 cents tomorrow. However, consider the cost of a fixed deposit, although it can be used as a payment,The most important is whether the purchasing power can be kept stable during the price change.In this sense, BTC can do this job for some as well, because it has good flow, the starting price indicates purchasing power, and is essentially hysteresis-free. However, Cheng Ye Xiao He defeated Xiao He, and the change would be very eventful because the rivers were too big and there was no so-called "anchoring mechanism". if 1 BTC 1 minute ago, there is 5% more purchase than BTC 1 minute later. It is not appropriate for a lot of people. naturally we haveanchored stability pieces. it is alsoTerra's work.

As a result, Terra's multi-room stability follows the same path as Celo. In other words, TerraSDR stable funds use fixed currency baskets and IMF SDRs as price measures to keep purchasing power stable. At the same time, it should be noted that TerraSDR is a general term for Terra stable funds, including TerraUSD, TerraKRW and others.Terra shares the liquidity., allows these stablecoins to absorb each other and reduce the exchange rate of each other, and maintain the security of the whole SDR without having to depend as much as possible on outside forces.

Knowing what the purpose of Terra Stabilitécoin is, let's see if there is a unique way to manage security besides the “traditional” ways of securing the basket of money. In turn, they stabilize the growth of the entire economic system.

A single double token stable like Celo and Fei

That's the main thing I said the last time in regular defense.

If prices fall by the anchor on the premise of

We have seen this process many times as simple and convenient. So I will not repeat it. But this time I was thinking of another problem, and the machine was doing the same thing as a central bank running a business. The absorption and release of goods is done through trade (such as contracts, release of income, purchase contracts and repayments). But in the case of DeFi, who is responsible for these policies? Personally, I think the answer given by Terra is very good.Miners in PoS networks have the same risks as the average banking policy.

Here we need to make sure that the miner's "power consumption" in the PoS network matches the number of characters promised. In other words, the probability of generating blocks of the miner is relative to the value of the promise. However, if the price is separated, Terra must comply with deflationary rules, reduce the SDR cycle, and buy TerraSDR back from the market to recover the price. Around this time, the system tampered with and sold more “computing power” (luna) to improve TerraSDR, thereby reducing the cost of the counting process.In a short time, the miners were able to absorb the volatility of TerraSDR.

So when the price of TerraSDR is deducted from the value of the currency basket, the miners will vote to determine the reliability of the current price. Miners can vote for whatever transit time they deem appropriate, and finally calculate the average number of each voter based on usage to see the difference with the oracle. Voters will benefit if they cast more than one ballot in the middle of the final round, otherwise they will be penalized.

In addition, in order to reward minors, the procedure is twofold:It guarantees the long-term income of the miners..

Income.In addition to blocking freebies, Terra also has an operating cost. Between 0.1% and 1%.

Income from seigneury.This means that some parts of the Luna repeat will be burnt. It balances the whole business. This continues until the moon reaches its maximum limit of 10b.

Terra also provided a simulation of the revenues of an energy calculation unit, and the results are as follows:

Duab Source: Terra White Paper

Therefore, the benefits of Terra miners may include the following models:

All of these changes are verbal. Suppose UnitMiningCost has not changed. The system can modify the rewards of minors by adjusting TotalRewards and LunaSupply. Make sure your income is under your control (you can estimate miners income, and in the long run you can see it is a profitable business without losing money. You can avoid problems like losing miners ), not to say that you lose money for a long time. This encourages miners to control the security of the network. The strategy for dealing with these two differences is also very simple.

If the mining rewards for a unit increase,

Reduce exchange rates

Reduce Luna's burn and increase LunaSupply's value.

The opposite is the opposite.

At the same time, how to reduce the exchange rate and the price of burning Luna have the following principles:

* F, b and R represent the exchange rate, the cost of electricity and the cost of mining, because the above model means that the two values ​​of time t 1 are related to both the value of time t and at time t- 1. For example, if the product of time t is half of the product of time t-1, then the product of time t 1 (g is constant).

Therefore, mostIn terms of stability stability mechanics, Terra can do this as well.This can also be seen in the UST fixed income exchange rate.Many measures have been determined and counted.

Of course, as mentioned at the beginning, securing the interest of miners and maintaining the stability of stability are all about promoting the development of the whole ecosystem, and intuitive performance. The volume market can be viewed as the chain's GDP, and as a Terra simulation, the GDP is as shown in the figure below.

Duab Source: Terra White Paper

Provide funding to support dAPPs to bring additional benefits to Terra

It's very interesting,Terra will use a portion of the proceeds from the Treasury to support activities that support the Terra business.. Of course, it's different from other chains, and it's not a blind giveaway. Instead, they weigh in on the numbers and then on the funding. At time t, the weight of each dapp is calculated accordingly

* The star is the average cost of completion, TV is the exchange rate, F is the product of the government budget and is the constant. TV is the average of the differences between all times and TV time. For example, this week the TV average minus last week the TV average is △ TV.

Terra complies with the requirements of the Ministry of Finance, its main objective being the allocation of resources based on business applications (dApps) via seigniorage. To collect seigniorage from the Ministry of Finance, dApp must register as an office on the Terra network. Eligibility for dapps funding depends on market and budget.Its main objective is to promote ecological prosperity and increase overall productivity.

concludes

For the most part, what Terra does is very special.Focus on creating stable coins.The whole chain is also working for stable money.among othersInstall MakerDao, although I must say:Mixing for stable processes is a viable option.. As a result, the company's Ace application has the cellar, an online payment application used by 3% of Koreans, which is very strong. Also, from a token investment perspective, its concept looks a bit like Curve. Token valuation is not only based on industry standards, but also staking nodes to achieve stable income. However, the identity and performance of the national team and the Korean project will always be visible.