"Money that counteracts inflation."
1. Today's money goes to central banks
Today money is issued to a central authority. Banks inflate for a myriad of stressful reasons, and they get to keep the new money they print. Each cycle of inflation dilutes the balance of every holder.
2. Tomorrow's money goes to the people
Tomorrow's money is issued directly to the people. μFragments inflate only in response to demand, and are distributed directly and proportionally to holders. This prevents balances from being diluted and aligns users with the network.
See the potential
Click Start to see how inflation can work for the people.
Alice's Balance: $10,000
Drag the slider to see how Alice's balance changes with demand.
Alice's Balance
μFragments
We believe that the best monetary system is
simply the least greedy system capable of fulfilling all functions of money.
μFragments is a price stable cryptocurrency that eliminates the devaluing effects of
inflation.
The protocol inflates and deflates only in response to demand, and distributes directly and proportionally to holders. This prevents balances from being diluted and aligns holders by allowing user balances to grow proportionally with the network's market cap.
Like Bitcoin, the μFragments currency begins as a store of value protocol that is volatile in
price and supply, but μFragments is a strictly better money than Bitcoin at steady state because it converges
on a stable unit of account—allowing it to take on all three functions of money.
Core engineering development is now complete and we're currently undergoing security audits.
Symmetric Elastic Supply
Much like Bitcoin’s algorithmically enforced promise of a fixed
supply policy, the μFragments protocol operates on the algorithmically enforced promise of
an elastic supply policy.
At a high level, the protocol seeks to move volatility from unit price to unit count.
Consider the following examples:
Adam purchases 1 Bitcoin at $1, demand increases and he now has 1 Bitcoin worth $6200.
// 2. μFragments Model
Betty purchases 1 μFragment at $1, demand increases and she now has 6200 μFragments each worth $1.
This difference may appear subtle, both Adam and Betty end up holding $6200 in
tokens—but the second model is strictly better than the first because it preserves
the unit of account function of money.
For example, an employer could not responsibly offer an employee a salary paying
1 BTC per month, but it could offer
6200 μFragments per month.
Similarly, a country could not responsibly borrow
100,000 BTC to be paid over the course
of ten years, but it could borrow 620,000,000
μFragments to be paid over the course of ten years.
And finally, a merchant could not denominate the price of a widget as
1 BTC, but it could denominate it as
6200 μFragments.
We accomplish this by symmetrically expanding to and contracting from coin-holders
in response to demand.
Simply Aligned Incentives
The protocol is simple. When μFragments are trading higher
than the price target we inflate to coin holders proportionally, and when μFragments are
trading lower than the price target we deflate from coin holders proportionally.
Consider the following examples:
>> Adam begins with 1000 μFragments.
>> Supply increases by 10%.
>> Adam now has 1100 μFragments.
// 2. Deflation Model
>> Betty begins with 1000 μFragments.
>> Supply decreases by 10%.
>> Betty now has 900 μFragments.
By adjusting supply to coin holders directly, the protocol avoids the devaluing effects of
inflation observed in fiat currencies, while re-engaging the supply mechanism that creates
near-term stability.
In addition to eliminating the negative effects of inflation, the symmetric elastic supply
policy naturally aligns μFragments with its early adopters because even when supply changes,
a given holder's percentage of the network remains fixed.
In other words, if Celine purchased 1 μFragment at a
market cap of X and the market cap increased to
2X, she would have
2 μFragments.
Similarly, if she purchased 1 μFragment at a market cap
of X and the market cap decreased to
0.5X, Celine would have
0.5 μFragments.
Like Bitcoin, gold, and other floating price assets the system implies a continuum of risk
and reward except the difference is reflected in count, rather than price.
The Path of Least Action
Money provides optionality to its users by storing
value in a more convenient medium for counting and exchanging value.
And there is no reason why the system responsible for issuing and regulating the supply
of money needs to profit. In fact, the more a system profits from the issuance of money,
the less efficient its money is at providing optionality.
For this reason, we designed the μFragments currency to adjust its supply only in
response to demand and to distribute all seigniorage to coin holders— making
μFragments the least greedy supply-based monetary system imaginable.
The currency begins price targeted to the US dollar, but will evolve to target the
purchasing power of a basket of commonly purchased goods. This game theoretic approach
has the benefit of:
- Eliminating Inflation
- Aligning Early Adopters
- Price Stability
- Global Scalability
- Government Independence
- Fault Tolerance