Hey guys,
Was wandering if someone could clarify to me what would happen once ADA’s max supply is reached?
How would the reward system/ staking work?
Would some of the coins have to be burned?
Would supply limit have to be raised?
Would it affect decentralization?
Since the need for currency is in trillions, what would happen to the value of ADA?
What are your thoughts on it?
Hello Sean,
Your answer is in this recent tweet from Charles (scroll down the thread) where he explains that ADA is NOT meant to be used as a currency but rather as a computational fuel to “oil” the network. For a currency, you “release a stable coin somehow connected to ADA.”
Awesome! Thank you CosmosX!
You’re welcome 
"For a currency, you “release a stable coin somehow connected to ADA.”
Have you seen any promising concepts concerning this? I have some ideas about smart contracts solving some credit and delivery issues in my line of work. But this is a problem that would need to be solved.
Tether? that they claim it’s pegged to usd
Lol… I could see that coming a mile away.
For sure, it’s not the “example” we need. … but i dont know another
You can issue IOUs for fiat, like Tether.
Or you can try to create a crypto only solution like Maker/Dia.
That’s the conundrum. Who or what is behind the IOU and why do you trust them? How do you create a stable monetary unit that can exist on these smart contract platforms that is decentralized and exists in a trustless environment? One way to solve the volatility issue is for counterparties to set the price in fiat to ADA at time of contract execution and hedge with a forward contract or eventually futures. Counterparties sign smart contract, ADA bought and locked up for transfer upon successful delivery. Smart contract or product/commodity seller then sells ADA futures or forward contract denominated in fiat to ADA. Closes futures position once they receive funds. Futures offset gains or losses versus cash (market rate at receipt of ADA) during period between signed agreement and delivery. So standard futures hedging within a smart contract environment. But this creates other risk issues as who’s on the other side of the forward hedge and how do we know they will perform. If ADA/Fiat futures exist at some point this is a better risk profile. But that’s not quite the decentralized market we’re looking to achieve. Moreover, this approach isn’t particularly elegant and doesn’t work for smaller transactions. I’d like to see IOHK or Cardano provide a paper at some point on solving this stable decentralized digital currency problem.
“release a stable coin related to ADA”…hmmmm?..could that be ETC? (although is already “released”)…I am just speculating since I think I remember Charles mentioning ETC more than once in his global tour… also a team of IOHK developers are part of the ETC team…
I’ve my doubts about Tether being truly pegged to USD. They have yet to produce an audit of their reserves.
And I’m no economist, but I would like to see a definition of what a ‘value stable’ currency is. This has been one of my sticky questions about ADA and its deflationary nature - which by definition (as far as I can tell) makes it ‘unstable’, meaning, eventually it’ll all be used up/bought up, and hopefully nicely distributed amongst as many stake holders as possible.
So, and I’m merely shooting from the hip here, if deflationary currencies are ‘unstable’ as CH intuited, then what pray tell is a ‘stable currency’? I’m gonna make a wild guess, but it’s probably one that is in fact inflationary, rather than deflationary - meaning, you have to be able to print (create) more to devalue the currency just enough to keep it ‘stable’, but without over-devaluing it and making it useless/paper-toilet worthy (hyper inflation, which is what happened in former Yugoslavia long ago, where I’m from).
I’d love to hear more about what makes a currency ‘stable’ from someone with a different background than mine…
Well said @cdufour. You are right, it is a project worth the brains behind IOHK.
The original thread question strikes at the heart of governance. Quite simply, what is to stop the governing body from “printing” more ADA. There will always be ways to justify just that given the right political and economic situations. Technically to allow the freedom for the “DAO” to manage change will likely also imply the ability to adjust the amount of currency in circulation.
This is why Cardano is so revolutionary and why its worthy of the best PHd’s in the world thinking about it. This could be as revolutionary as the constitution was in the USA (sorry for the USA centric slant). I really view this as the start of a new financial world order because these things need to, and will be, encapsulated in the thinking that the treasury (Cardano foundation) is putting together.
The people that think Cardano is moving slowly have no appreciation of the scope that the project is trying to achieve.
Was wandering if someone could clarify to me what would happen once ADA’s max supply is reached?
Nothing special will happen.
How would the reward system/ staking work?
The same as before. Once staking starts, stakeholders who provide computational, storage and network resources to the platform get paid from two sources, and so does the treasury:
About 13 billion ADA remains to be minted. Although the exact parameters are still under research and review, I’m guessing that the rate of minting will decrease over time. This would mean that in the end stakeholders and the treasury are paid using only transaction fees. Minting being stopped will be seamless, as rewards through minting are slowly, gradually decreased and not suddenly taken away.
Would some of the coins have to be burned?
No. Why would they?
Would supply limit have to be raised?
No, but the community can vote to do so, if it makes sense at the time. The 45 billion ADA cap is completely arbitrary.
Would it affect decentralization?
No, because node operators and stakeholders are still properly compensated.
Since the need for currency is in trillions, what would happen to the value of ADA?
The reduction in supply would make the price rise in the long term, if demand stayed the same.
Thank you! Appreciate the answer 
!
Believe that. And someone will be left holding the bag, don’t let it be you.
‘stable’ is relative by definition.
BTC is volatile against USD, or we could equally say, USD is volatile against BTC.
Notice how the crypto currencies are ‘stable’ relative to each other. ETH is pretty stable against BTC.
Notice how the fiat currencies are ‘stable’ relative to each other. EUR is pretty stable against USD.
Two different worlds.
or you create a basket of currencies and use the exchange float of an SDR
Yes, this whole “stable coin” thing seems like a misnomer. The stability that everyone is after is actual an environmental one. Meaning BTC is perfectly stable if you only exist in BTC. You get paid, pay bills, and go to the movies etc in one currency. That’s the stability people seem to be talking about but somehow want from a system of constantly equal currencies. I suspect the future we are stumbling towards is more likely to be coins for different uses and various unified wallets with incorporated DEXs and p2p atomic swaps (maybe the same thing?). This would facilitate a wallet function of instant/auto-converting any incoming coins to your “home” coin of choice. So while my plumber wants to be paid in LTC, I like to live in BTC, so when it comes time to pay our wallets take care of the transaction seemlessly. Now what this seems to be starting to point to is some sort of universal value system to speak in. Something like GMT is for clocks. BTC is setup as this unit in the crypto world, and USD (?) is in the fiat world. The problem with this arrangement is there is no unifying measure, and since both have value unto themselves they can be manipulated and/or simply change erratically for natural reasons. So the ideal scenario is some sort of new unit in the metric system for value. Something like “Value Exchange Denominator”. So I would pay my plumber 10VED and that would come out of my wallet in BTC and into his as LTC. All the while 1VED is completely stable and outside any entitiy’s control. It simply gets valued at the closest possible to 1 of the average of the top 25 currencies in the world the day it is instituted.
The word you are looking for is “Gold”
What about this scenario? Let’s say all the 13bil coins are minted, so the incentive is just transaction fees. How do you offer enough incentive through transaction fees to keep the network healthy and running but also the transaction fees low?
Secondly, we agree that ADA is not going to be used as a currency, but rather “oil to keep the machine running.” If ADA is not being used as a currency, then how is the network going to receive transactions to offer incentives to the network?
Lastly, this is not my field of expertise, but I do believe in the tech and I want to offer help. Any information would be appreciated.