# kaal:claim:3782216-032

**Claim.** Determining what fraction of a currency is hot money is necessary for efficiently defending its stability: overestimating the hot money ratio makes the currency costlier to use, and underestimating it makes the currency insecure.

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

**Source quote.**

> Therefore, determining the fraction of a currency that is hot money is necessary for efficient defense of its stability. A currency that overestimates this hot money ratio will cost more to use. A currency that underestimates the ratio will be insecure.

**From.** Craig Calcaterra, Wulf A. Kaal, *Decentralized Finance (DeFi)* (2021), Hot money

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Decentralized Finance (DeFi) (2021). SSRN: https://ssrn.com/abstract=3782216

**Verify.** sha256 of source PDF `f1739743aa06bbc1641cd65da790d531b69d8628ea3f5cc3fcad1bf5a1242373` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20and%20Kaal%20-%202021%20-%20Decentralized%20Finance%20%28DeFi%29.pdf

**Failure mode.** misestimated hot money ratio  (family: measurement-and-metric-failure)

**Topics.** tokenomics, consensus-and-security, economics

**Keywords.** stablecoins, hot-money, efficiency-security-tradeoff, peg-defense

**Related claims.**

- restates: https://wulfkaal.github.io/claims/3402701-024
- extends: https://wulfkaal.github.io/claims/3402701-023
- extends: https://wulfkaal.github.io/claims/3402701-018

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.