# kaal:claim:3402701-004

**Claim.** 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.

**Type.** condition  **Support.** argued

**Holds when.**

- backing assets are volatile cryptocurrencies

**Source quote.**

> 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, page 6

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

**Verify.** sha256 of source PDF `72ed2581b4cac2bd18a5b2640be959487a3cbc34c86ab5e5664924bcdb53c8e0` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202019%20-%20Stable%20Cryptocurrencies%20-%20First%20Order%20Principles.pdf

**Topics.** tokenomics

**Keywords.** overcollateralization, crypto-backed-tokens, volatility, makerdao

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3396522-012
- restated_by: https://wulfkaal.github.io/claims/3782216-030

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