Society · Economics
ValuePeg
Translating internal utility to shared numeraire
Definition
Mechanism
Agents agree on a specific ExchangeRate between their internal utility (see Value, Optimize) and a shared numeraire for the duration of an interaction. This allows them to trade 'apples for oranges' without exposing private value functions.
Invariants
- Solvency: Reserves > Outstanding Liabilities * RiskRatio.
Risks
Failure modes
Peg Volatility
Rapid fluctuations in the numeraire destabilize the agreement.
Relationships
Builds on
Yields
Conversion ratio between value systems
Nothing in this library builds on this pattern yet.
Reference