Adaptive Currency Explained
An adaptive digital currency is simply digital money that adjusts supply based on real-time demand.
There are other adaptive currencies, but the devil is in the details. Here’s how ndau is unique.
How does ndau compare with another adaptive currency like Ampleforth?
Ampleforth is a fascinating new adaptive currency experiment that has been generating a lot of excitement with completely new economic concepts such as “rebasing.” While ndau is in the same “adaptive currency” category as Ampleforth, there are some key differences (both technical and philosophical) that should be made clear.
1) We believe an adaptive digital currency should act in a familiar and predictable way so people are not confused by their money’s behavior.
One way that ndau is different from Ampleforth is in the expansion and contraction part of adaptive monetary policy. Ampleforth calls this “rebasing.”
ndau’s philosophy is that an important part of stability includes the gradual inclusion of a currency into contracts, denominated in that currency. This is a big reason people hold USD in general — to pay near-term obligations denominated in dollars when they don’t wish to be caught short because of fluctuations between assets. As an example, if someone is obligated to pay 100 ndau at a future point in time, that amount is fixed according to a contract.
With ndau, if you have an amount of ndau in your wallet sufficient to cover that 100 ndau obligation, it won’t involuntarily be subtracted from due to a sudden and uncontrollable contraction monetary policy the way Ampleforth does during a rebase. ndau’s contraction (e.g., “burning” via SIB) only happens when defined actions by the owner occur that they have a choice over (e.g., a Transfer transaction). Overall, rebases in Ampleforth do not add any value for holders while simultaneously being uncontrollable and unfamiliar to users and contracts.
The amount of ndau in your wallet and accounts will never change beyond your control.
2) We believe that yields and staking income should be available to all holders in a way that is easy to use and understand.
Conventional cryptocurrency staking can be confusing or require trusting 3rd parties (typically exchanges) with your private keys. Ampleforth has no built-in staking income opportunities, and you can only leverage Ampleforth for passive income by playing the complicated and risky game of DeFi yield farming and liquidity mining.
ndau’s staking income features are at the core of ndau’s design. As a holder, you automatically earn yields by simply holding ndau in your wallet app, and you can earn even more by “locking” your accounts for specific periods of time. And yields can be compounded or sent to another account for immediate spending.
ndau gives you easy to use and powerful staking income options that let your ndau work for you.
3) We believe adaptive money should have a goal to be more than stable. We believe adaptive money should be buoyant.
Stablecoins are a useful tool in the cryptocurrency space. Their goal is to remain constant at all times, typically pegged to the value of a fiat currency such as the U.S. dollar. Ampleforth’s goal is similar to stablecoins, to be a “unit of account” with a target/peg of around $1. Through Ampleforth’s adaptive monetary policy, the price is adjusted up and down to get as close to the target as possible.
ndau’s goal is to be buoyant, which means it is free to rise in value along a bonding curve as demand warrants.
Buoyant objects rise to the top, and ndau has the freedom to rise while mitigating downside volatility.