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Analyzing a collateral backed pricestability implementation in a pricestable cryptocurrency
KTH, School of Engineering Sciences (SCI).
2018 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesisAlternative title
Analys av en pantsäkerhetsbaserad prisstabilitetsimplementation i en kryptovaluta (Swedish)
Abstract [en]

A price stability implementation in a proposed collateral backed cryptocurrency was assessed in order to identify which factors increased its robustness and improve on the design. The dynamics of the cryptocurrency were modelled as a stochastic dynamical system and put to the test under different scenarios. The results emphasized the importance of using low volatility currencies to create a basket of collateral assets. Cryptocurrencies was regarded as inappropriate due to their generally high price volatility. A large degree of collateralization was also deemed important for system stability. In order to avoid a permanent failure of the system, the results found that the most beneficial design would be to allow the price to collapse under controlled circumstances in the event of critical undercollateralization. This allowed the system to recover to a collateralized state over time. Evidence was also found of the possibility to influence the risk of undercollateralization by optimizing the allowed deviations from the target price depending on the the cryptocurrency’s own price volatility.

Abstract [sv]

En implementation för prisstabilitet baserad på pantsäkerhet i en tilltänkt kryptovaluta utvärderades i syfte att identifiera vilka faktorer som påverkar dess robusthet och förbättra dess utformning. Dynamiken i kryptovalutan modellerades som ett stokastisk dynamiskt system och testades i olika scenarier. Resultaten understrykte betydelsen av att använda valutor med låg volatilitet för att skapa en valutakorg till

pantsäkerheten. Kryptovalutor bedömdes som olämpliga på grund av deras generellt sett höga prisvolatilitet. En hög pantsäkerhetsgrad ansågs även viktigt för systemstabiliteten. För att undvika ett permanent. Resultaten visade på att den mest fördelaktiga utformningen tillät en priskollaps under kontrollerade former vid händelsen av kritiskt låga säkerhetsnivåer. Bevis på möjligheten till att påverka risken för låga säkerhetnivåer genom medvetna designbeslut hittades också.

Place, publisher, year, edition, pages
2018. , p. 62
Series
TRITA-SCI-GRU ; 2018-110
National Category
Engineering and Technology
Identifiers
URN: urn:nbn:se:kth:diva-231474OAI: oai:DiVA.org:kth-231474DiVA, id: diva2:1228652
Supervisors
Examiners
Available from: 2018-06-28 Created: 2018-06-28 Last updated: 2018-06-28Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf