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 "identifier": "kaal:claim:3402701-019",
 "text": "Selling currency into a reserve when price is above the peg and buying it back with the reserve when price is below the peg yields an arbitrage profit, so a reserve can fund its own defense of the peg.",
 "author": {
  "@type": "Person",
  "name": "Wulf A. Kaal",
  "identifier": "https://orcid.org/0009-0008-7840-1847"
 },
 "citation": "Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701",
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  "@type": "ScholarlyArticle",
  "name": "Stable Cryptocurrencies - First Order Principles",
  "datePublished": "2019",
  "url": "https://ssrn.com/abstract=3402701",
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 },
 "keywords": [
  "institutional-design"
 ],
 "about": [
  "reserves",
  "arbitrage",
  "quantity-theory-of-money",
  "peg-defense"
 ],
 "abstract": "In the next paragraph we demonstrate the obvious result that selling the currency when the price is high to build a reserve, then buying the currency back with the reserve when the price is low will yield an arbitrage profit",
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   "value": [
    "the reserve currency is more stable than the base currency",
    "the cost to implement and maintain the reserve is ignored"
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