Will ethereum classic listing on coinbase affect Ada? Will there be any special pairing between two. Will we be able to exchange ETC to Ada using Deadelus at some point.
I’m curious if there is any effort from IOHK or Cardano Foundation to control the value of Ada in order to provide some stability in the ecosystem. It’s probably far fetched, just a thought
Not now, but it is an interesting proposition from a game theoretic perspective.
In the future anything is possible. We could have something of a treasury contract tasked with buying/selling ADA in the open market to keep prices from going crazy.
Before we hit a widespread adoption, it would be crucial that the price of computation in ADA’s ecosystem remains “accessible” to a wide variety of users.
One way to do it would be to make the transaction costs fluctuate in an inverse correlation with the market price of ADA.
The other way would be to try to keep the price of ADA at some stable growth corridor.
The first option is probably where we are headed… because price manipulations with limited supply don’t work well. We are absolutely guaranteed to have significant price increases in ADA as the platforms use increases.
The trick is not to make transactions expensive as a result. Luckily there are ways to do so through sudechains.
PS: I am in no way affiliated with IOHK or the Cardano Foundation.
I believe this is what central banks refer to as “open market operations”.
yes. Blockchain platforms are effectively countries with their own currencies. so, no surprise they will need some way to stabilize their currencies. The question is, how they will choose to do it… It’s not a matter of if but when.
You can’t expect people to buy your currency at exorbitant prices, especially if it is used to fund high throughput computation. Something is gotta give. Assuming your total supply is fixed it will have to be either the price of currency or the price of the computation.
IMO: it’s not something likely to happen. Sorry but let me explain this.
Assume that we have a continues trading strategy - the higher price goes, the more it sells. But this means that somehow the wide open contract needs to know (better than most people) when is the proper time to sell ADA and buy back at proper low price.
If it’s an open strategy… will it work?
OK now let’s assume the contract works well. So what now? It means the Treasury earns money from the market! The treasury earns more, the people lose more. So here comes the following question: is it right to have a contract to win agains real people?
The contract couldn’t make it … People know the strategy and act agains it to win money from the treasury. - Who is responsible for the treasury’s loss? (witch could otherwise be used for platform dev eg.)
So, not a good idea it seems.
Now let’s find a good definition for “crazy” for the contract, and put a great sell-wall at the crazy point in the market, then:
a) The price never hit the wall.
= No bug, but somehow meaningless. (If this is what we want, then put 1ADA for 1BTC, or put the wall 10x the current price in 24h. )
b) Occasionally people buy at the wall, then the price goes down.
= People are losing money. See 1) above.
c) The wall breaks down. Either by some big whales or people just get too crazy.
= Game over.
/ = The treasury are losing money - let’s assume the price never gets down again(or not in a long time), so in order to continue to function (when the price is high up there), the contract has to buy ADA back at a higher price. See 2) above.
Wow, did I wrote too much? half an hour late for lunch…this is really some piece…
The strategy is unlikely to work but not because of timing/etc. but because of limited ADA supply. Otherwise, it is possible to keep the price of an asset within a certain range… Central banks do that all the time in open market operations.
I don’t delve into those ‘is if fair’ type of questions. Especially if the issue is market. Whatever happens in the markets is fair. If you are the sucker who loses, maybe you shouldn’t be there. If you know the market forces will keep the price within a certain range you’d be pretty stupid to deviate. Case in point: USDT. No one is bidding it up to $1.5 or $2 per USDT. If you want to buy it at those prices they would be happy to print them for you and make an instant profit.
Ideally, you would have a strategy that would not make money or lose money in the long run. What happens in the interim is of no huge consequence, especially viewed in light of what price stability creates–more demand for ADA. so a small loss in treasury could be more than offset by the increase in demand from actual end users who would pay transaction fees to have their dApps run on Cardano’s network. The whole network–including the stakeholders will benefit from this.
Look at the bigger picture