Ecosystem Algorithm

Zetos Share is a token that adjusts its supply deterministically (i.e. using an algorithm) so that the price of the token moves in the direction of the price target Zetos Cash.

At the most basic level, an algorithmic stablecoin expands its supply above a target price and contracts below it.

When the currency price is too high, monetary easing is required, which is the so-called "water release", and when the currency price is too low, the currency needs to be tightened.

The legal currency in the real world, the country's future currency stability, mainly depends on the national central bank and financial means to maintain the dynamic balance of supply and demand of the currency, so as to ensure that the purchasing power of the currency remains within a relatively predictable fluctuation range.

In order for Zetos Share to be viable in the long run, they need to be decentralized and stable.

This task is particularly difficult for many algorithmic stablecoins due to their inherent reflexive nature. Algorithmic supply changes are designed to be counter-cyclical; expanding supply should lower prices, and vice versa. In practice, however, supply changes often spontaneously amplify directional momentum, especially for algorithmic models that do not follow the “ seigniorage-share ” model, i.e. by separating stablecoin tokens from value-generating and debt-financing tokens .

Last updated