Stabilizer Pool 4: Fractional Reserve and Hedging

Credit: Roger Deakins

This is Part 1 in a series of three articles explaining Stabilizer Pool 4 (SP4). The goal of SP4 is to build an algo-stable asset with collaterals and supporting expansionary policy with real asset-backed inflation. In this article, we will specifically discuss:

Problems with Algorithmic Stablecoins

Capital Efficiency and Collateral Model

dStable: SP4 Mechanism

Simple illustration of how $1 is backed with capital efficiency and risk mitigation.

Returns of Collateral Provider

Risk management model of SP4

Options for ETH reserve

Why this modular monetary policy is chosen

DEGOV: Network Security and Value Accrual