Analysis of “Seigniorage Shares” Algorithmic Stablecoins
Quick Take
- Stablecoins built on the seigniorage shares model consist of (at least) two tokens — a stablecoin and an investment token
- The investment token is designed with properties that incentivize the stablecoin to approach its desired value peg (e.g. $1)
- Algorithmic stablecoins have interesting properties, such as no requirement for collateral, but it’s unclear how such systems will perform under duress
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Author: Mika Honkasalo
