# Peg design

`kaal:entity:peg-design`

**Status.** derived

This node is assembled mechanically from the 5 claims that carry the concept tag `peg-design`. 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 2 works, 2019 to 2019.

**2019**

- [3396522-008](https://wulfkaal.github.io/claims/3396522-008) [failure/argued] *(failure mode)* -- Both collateralization strategies carry significant downsides: fiat collateralized pegs bear the brunt of expensive capital requirements, while cryptocurrency pegs face heavy volatility pressures and swings.
  > Collateralized fiat currency pegs bear the brunt of expensive capital requirements and uncollateralized cryptocurrency pegs face heavy volatility pressures and swings.
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies (2019). SSRN: https://ssrn.com/abstract=3396522
- [3396522-009](https://wulfkaal.github.io/claims/3396522-009) [condition/argued] *(failure mode)* -- A fiat backed stable cryptocurrency that is not fully collateralized is exposed to arbitrage trade attacks of the kind George Soros used against the pound sterling; full collateralization is therefore a necessary defense.
  > Without a 100% fiat collateralization, such projects would run the risk of arbitrage trade attacks similar to what Financier George Soros used to "break the bank of England
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies (2019). SSRN: https://ssrn.com/abstract=3396522
- [3396522-010](https://wulfkaal.github.io/claims/3396522-010) [mechanism/argued] *(failure mode)* -- Fiat currency collateralization is expensive and inefficient because the entire backing value must be held liquid; anything less opens arbitrage opportunities of the Soros type.
  > Fiat currency collateralization is expensive and inefficient because all of the value that is backing the cryptocurrency needs to be liquid, otherwise arbitrage opportunities, such as the Soros attack, are possible.
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies (2019). SSRN: https://ssrn.com/abstract=3396522
- [3396522-011](https://wulfkaal.github.io/claims/3396522-011) [mechanism/argued] -- The minimum price of a fiat backed stable cryptocurrency is the interest rate of the fiat currency it is pegged to, because the collateral must sit liquid rather than earn a return.
  > Therefore, the price tag of fiat-backed tokens is, at a minimum, the interest rate of the pegged fiat currency.
  Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Stable Cryptocurrencies (2019). SSRN: https://ssrn.com/abstract=3396522
- [3402701-031](https://wulfkaal.github.io/claims/3402701-031) [design/argued] -- When a fundamental shift in value occurs, repegging the currency at its more accurate value is more efficient than soldiering on with tax mechanisms to restabilize at the old peg.
  > but it is more efficient to repeg the currency after discovering its more accurate value
  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/peg-design.md | sha256sum

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