# kaal:claim:3402701-013

**Claim.** Bonds are the appropriate burning mechanism for a temporary drop in currency price caused by larger economic instability such as an act of God or war, since bonds can be redeemed above their sale price once the economy rebounds.

**Type.** design  **Support.** argued

**Holds when.**

- price decline caused by temporary economy-wide shock, not hot money

**Source quote.**

> Bonds should be used to address a temporary larger economic instability which lowers a currency's price--due to an act of God, for instance, or war

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Stable Cryptocurrencies - First Order Principles* (2019), 3.1.2.1 Bonds, page 17

**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.** bonds, burning, monetary-policy, stablecoin-design

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