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RE: Genki FS launches StatiCoin, a stable digital currency
Welcome to steemit with this interesting concept. So you need the same amount of money to be invested into risk to emit Stati ? and what happens if the ether go down from $300 to $30 ?
Thanks for the welcome!
Good questions. This example is slightly simplified. We've set the contract so initially there is a 3:1 , riskcoin:staticoin ratio so staticoin holders are covered for 75% falls down to $75/ETH below this point riskcoin have a 0 price and cannot be redeemed, but staticoins can always be redeemed on a first come first served basis (i.e. until the money runs out).
The price reference is a 24 hour average from Kraken, so flash crashes/whale sales shouldn't have an effect, but a long period of low ETH price would mean that most staticoin holders would withdraw their funds.
These contracts control volatility, but do not protect against a full scale crash of ETH. In fact, no ETH backed contract would protect against this type of event.