Can IOHK, EMURGO and CF accept ADA?

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One of the major factors in the success of Cardano is non-trading liquidity. What does it mean? It means there is a constant supply and demand for ADA from non-speculative sources.

I recently listened to a podcast about Binance and it struck me how much they nurture their coin. Binance employees are paid in BNB, Binance itself is paid in BNB and soon Binance blockchain stakeholders will be remunerated in BNB. CZ seems to embrace the philosophy of eating what he cooks. It builds enormous trust in the community.

That got me thinking:

IOHK, CF and Emurgo are the pillars of Cardano support. What is precluding them from accepting ADA for their services AND paying their staff in ADA? If we want adoption to take off, shouldn’t we start with ourselves?

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Probably for the same reason we don’t get paid in bitcoins yet - neither Ada nor Bitcoin are considered stable coins like the us dollar. They could probably accept payment in Ada for some types of transactions, like donations or purchase of apparel… Until someone, e. g. Cardano or another group that’s taking a similar, formal approach whose name at the moment eludes me, figures out how to formalize the definition of a stablecoin, the fiat currencies will remain de facto means of day to day. transactions for most people.

The only thing we have currently in crypto that resembles a stable coin, as far as I am aware, is USDT - tether. It’s pegged on the US dollar, one for one - or so they claim. They achieve stability by pegging it to the dollar which is guided by a set of properties resulting in a stable coin, namely inflation, centralized control over debt based currency creation, backed by your and mine’s promise (under threat of law enforcement if we fail) to repay our debts rather than anything else, and centralized control over the interest rate which controls the supply of moneys lent by the money printers (the Fed), and every bank further down the trough, all marked up, by the time it hits you on your car loan or mortgage.

My guess is any stable coin will have to guarantee these mathematical properties that exist for the USD… whether through staking, the existence of a crypto-Fed guided by stake holders, controlled inflation… or perhaps built in inflation with interest rate control, if it is going to be analogous to fiat.

See, I don’t really think crypto is reinventing human behavior or how finance has been done since the dawn of currencies… what it is doing is making it more accessible and very transparent. With that, increased accountability is bound to ensue, and with it hopefully greater integrity - e. g. no more too big to fail because your uncle is a golf buddy with the chairman of the federal reserve (hypothetically speaking) whom you can get to quantitatively ease your debt obligations until you are ready to repay…

In an ideal world, they would be allowed to fail and out of the ashes of whomever collected on their debt, hopefully a new, more nimble player will arise after they sack the CEO and the entire board or course.

Then again, maybe that’s just a pipe dream, crypto or no crypto… and people are going to remain immutable in their out of integrity behaviors whether on the net in some cryptochain… or in 3d spacetime with fiat. Crypto is no panacea for these orthogonal issues to finance/currency, such as human behavior… but it ought to make it a little bit better than the current state we are in.

Just think about this tidbit… if you could merely account for all dollars in existence, that alone would be a breakthrough…along with how much of it moves and between whom in most cases. It’d be a real boon to policy decisions.

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I understand the reservations people may have with regards to ADA’s fluctuations. This is due to the fact that people, business entities and even blockchain companies exist within certain jurisdictions and have to pay the bills in the currency of their respective jurisdictions.

HOWEVER, this ‘problem’ can easily circumvented by de-coupling the currency of payment from the currency of the contract. Two examples:

  1. Say IOHK is contracted to build the enterprise solution for Adis Ababa. The development of the platform itself can be paid in any currency. Here you can’t have much wiggle room with those who are footing the bill. But once the platform is built, we will only have operating costs. IOHK could simply quote their price in USD but request the payment in ADA. So on the day of the payment:
  • Adis Ababa, will convert the USD amount due into ADA through an exchange
  • Adis Ababa Transfers ADA to IOHK
  • IOHK has the option to sell it in the market or pay their staff or hedge it through futures contracts thereby stabilizing the USD value of their revenues.
  1. Staff at CF, IOHK and Emurgo are paid in ADA although their salaries say are fixed in fiat. Every payday, these companies either purchase ADA in the open market at prevailing ex. rates and pay their staff, or, If they have ADA denominated income, they may completely cover these expenses from their income and have ZERO ADA exposure.

These rules could increase liquidity and value of ADA in the long run. I could even see how these companies could increase their value by holding to their ADA while they onboard more clients. This would increase their exposure but also give them a relatively quantifiable upside.

Something to think about for their treasuries.

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I think the point is you have to do something special to stabilize your coin for use. I don’t see why the use case of paying staff and partners in ADA would be that hard to do, but to do it right you probably need real smart contracts and the like (i.e. not yet), otherwise you would need some special mechanism so that these non-speculative token users can cash in at a stable rate.

I’m sure they thought about it, and they decided to float the coin price at the ICO. From what I’m starting to understand, this might be a good use case for bonding curves. Seems like a good solution for any currency before it goes to scale and a market stabilized value is more realistic.

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I understand where you are coming from but stable against what? These companies have staff/expenses in many different currencies. They can pick USD as their unit of account but for someone living in Japan his USD based salary will fluctuate in JPY.

Currencies constantly fluctuate against each other. There is just no way they could be stabilized unless you live in a dictatorship.

The best way to reduce the fluctuations is to create demand/supply for ADA.

The most logical place to start with are CF, IOHK and Emurgo.

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Yes, I love your question too. What is the reference? is the central question for defining/designing a stable currency. USD makes sense and is target of (several?) stablecoins, but maybe you want to pick the Terra?