entity · derived
Peg defense
Derived node: assembled mechanically from the claims carrying peg-defense. A roster, not an adjudicated definition.
Every claim under this term
- 3402701-019 : 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
- 3402701-020 : The reserve argument depends on two requirements, and failing either one grounds a criticism of an existing protocol: the stable-value requirement criticizes MakerDAO and the maintenance-cost requirem
- 3402701-021 : Contesting the common assumption that a 100 percent reserve is required to guarantee a peg, the authors argue full reserves are not always necessary for any currency that has intrinsic worth.
- 3402701-022 : Contesting the standard reading, the authors argue Soros broke the Bank of England not because the pound lacked full foreign reserve backing but because the pound was pegged at an inauthentic value.
- 3402701-023 : Determining what fraction of a currency is hot money is necessary for efficient defense of its stability, because the reserve requirement follows from that ratio rather than from a blanket full-backin
- 3782216-032 : 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