# kaal:claim:3402701-030

**Claim.** For any long-lived currency, a major shift in perceived value is eventually inevitable, and such a shift is not covered by reserves defending against hot money or by bonds defending against temporary economic instability.

**Type.** predictive  **Support.** argued

**Holds when.**

- long-lived currencies
- black swan events

**Source quote.**

> For any long-lived currency a major shift in the perception of the value of a currency is at some point inevitable; a shift that is not accounted for by a reserve defending against hot money fluctuations or bonds defending against temporary instability in the larger economy

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Stable Cryptocurrencies - First Order Principles* (2019), 3.3 REPEGGING, page 24

**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

**Failure mode.** black-swan-peg-break  (family: valuation-and-pricing-failure)

**Topics.** institutional-design

**Keywords.** repegging, black-swan-events, reserves, bonds

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