Description
I've been pondering the subjects in this paper for a while and I just fortunately stumbled upon it while exploring ideas with ChatGPT. It was a very interesting read and solidified and labeled some concepts in mind.
I wonder if there could exist a truely endogenous stabilisation model that is not tied to any external parameter like computation cost.
Something that comes to mind is bonds. In a currency without loans, savings account or interest rates and no risk of default, what determines the price of a bond? The only factor is expected inflation. If people expect more inflation to occur the nominal bond price will fall and vice versa.
In other words we can derive the expected changes in the real value of the currency from the nominal bond prices.
Could a cryptocurrency with some bond market use this data to decide the needed adjustments in supply to provide stability?