# Bonds

`kaal:entity:bonds`

**Status.** derived

This node is assembled mechanically from the 5 claims that carry the concept tag `bonds`. It is a roster of what the corpus says under this term. It is **not** an adjudicated definition: no single statement here has been ruled canonical, and no first-appearance call has been made. Read the claims and judge for yourself.

## Every claim under this term

5 claims across 1 works, 2019 to 2019.

**2019**

- [3402701-013](https://wulfkaal.github.io/claims/3402701-013) [design/argued] -- 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.
  > 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
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701
- [3402701-014](https://wulfkaal.github.io/claims/3402701-014) [failure/evidenced] *(failure mode)* -- A Basis-style bond scheme succeeds only while demand for the currency grows at a sufficient rate; the authors' simulations show it fails when demand is stagnant at equilibrium.
  > According to our simulations, this scheme will succeed as long as demand for the currency is growing at a sufficient rate, but it will fail if the demand is stagnant at equilibrium
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701
- [3402701-015](https://wulfkaal.github.io/claims/3402701-015) [failure/argued] *(failure mode)* -- Because bonds sell below their redemption value, an open-ended bond queue grows without bound, depressing bond prices and creating a positive feedback loop that ends in a death spiral and failure of the peg.
  > More generally, since the bonds would sell at a price lower than they were redeemed, the bond queue would grow without bound, leading to lower prices for the bonds and a positive feedback loop which would lead to a death spiral and the failure of the peg
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701
- [3402701-016](https://wulfkaal.github.io/claims/3402701-016) [design/argued] -- Stable cryptocurrency bonds should be minted with a fixed expiration, following the practice of historical central banks, because fixed expiration makes price discovery more efficient.
  > We also recommend following the example of historical central banks, in minting bonds with fixed expiration so price discovery is more efficient
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701
- [3402701-030](https://wulfkaal.github.io/claims/3402701-030) [predictive/argued] *(failure mode)* -- 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.
  > 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
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies - First Order Principles (2019). SSRN: https://ssrn.com/abstract=3402701

## Verify

Every claim above resolves to a record carrying a verbatim source quote, the sha256 of the source PDF, and a preformatted citation. Nothing here asks to be taken on trust.

    curl -s https://wulfkaal.github.io/entities/bonds.md | sha256sum

**Canonical form.** This markdown file is the canonical hashed representation of this entity node. Its sha256 is the content hash.