Want to know more about prime（ https://primematrix.io/ ）There are two academic papers published in 2014 that are worthy of our attention: one is written by Ferdinando ametrano, a professor at the University of technology of Milan, who was the project director of bitcoin developers’ conference, and the other is “Hayek currency: a solution to the price stability of cryptocurrency”; and the other is written by a professor with 11 “Cryptocurrency stabilization: seignorage shares,” by Robert SAMs, cryptocurrency economist with years of hedge fund experience.
Drawing on the economist Friedrich Hayek’s criticism of the gold standard, ametrano believes that bitcoin cannot fully perform our requirements for the function of currency as an account unit because of its deflationary nature. Instead, he proposed a rule-based, supply resilient cryptocurrency, which could rebase the token supply according to demand, for example, to change the money supply of all token holders in proportion.
Prime is almost the same as “Hayek currency” proposed by Ferdinando ametrano. The supply of prime is expanded and contracted according to the deterministic rules based on twap: the supply quantity below the price target range shrinks, and the supply volume increases when it is higher than the price target range. It is crucial that each wallet is proportional to each supply change. If someone holds 1000 prime before rebase and the supply increases by 10% after rebase, he will hold 1100 prime now.
And unlike other types of algorithmic currencies, prime is highly reflexive: demand is largely driven by market sentiment and momentum. The power of the demand side is transferred to the token supply, which generates further directional kinetic energy, and finally forms a violent feedback loop.
Bitcoin has a similar reflexivity. In order for more and more people and organizations to use bitcoin, bitcoin must have more and more liquidity and acceptance. Over the years, these features of bitcoin have been continuously enhanced, which makes the users of bitcoin expand from the original dark network participants to the later rich technicians and the recent traditional financial institutions. This is also the development path that prime needs to follow in the future.
As the economist Friedrich Auguste von Hayek wrote in his 1976 masterpiece, the denationalization of money, I believe that mankind can do better than gold in history. Although algorithmic currency is still in its infancy, it can eventually become Hayek’s blueprint for money market vision and lay the foundation for it. Prime, as the representative of algorithmic coin, will lead this process with its strong consensus.
