kaal:claim:3402701-004

Cryptocurrency-backed tokens must be overcollateralized well beyond 100 percent of current value because the backing basket can fall, which makes them even more expensive than fiat-backed tokens.

Source quote, verbatim

Any cryptocurrency-backed token must be backed with much more than 100% of the current value of the cryptocurrency in case the basket of other crypto currencies' value drops

From

Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019), 1 INTRODUCTION, p. 6
https://ssrn.com/abstract=3402701 · source PDF

Cite as

Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701

Holds when

backing assets are volatile cryptocurrencies

Classification

conditionsupport: arguedtokenomics

Related claims

restates kaal:claim:3396522-012 Cryptocurrency backed tokens are more expensive than fiat backed tokens because stability is sourced from far ...
restated_by kaal:claim:3782216-030 Cryptocurrency backed stablecoins are even more expensive than fiat backed ones, because stability is being so...

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