DEBASE – The Last Piece of the Puzzle

Source: https://satoshi.nakamotoinstitute.org/posts/p2pfoundation/3/

Around one month after Bitcoin’s inception, Satoshi himself explained the struggles he faced when
considering an elastic supply for Bitcoin – it was a dilemma between soundness and
decentralisation, of which he chose the latter.

Since then, the quest for ‘some clever way’ to actively manage the money supply of digital
currencies in a decentralised manner has been experimented with, but failed miserably. Ampleforth
($AMPL) brought to us a synthetic commodity-money, self-described as ‘like Bitcoin, but with
near-perfect elasticity, like fiat’. In theory, rebases with supply smoothing sounded great to control
price shock and maintain a peg to the dollar, but in practice, $AMPL’s Achilles heel laid on
overlooking the importance of user incentives to hold the currency when it deviated below the peg.
There was incentive to hold $AMPL above the peg during supply expansions, as positive rebases
could become lucrative in the form of extra tokens (assuming increase in volume continued),
however, during supply contractions the incentives to holding $AMPL was close to none; negative
rebases shrunk holders’ number of tokens, consequently causing massive panic selling, which
further deviated the price from the peg, causing harsher negative rebases and repeating the cycle –
this was codenamed the ‘spiral of death’.
Ampleforth failed by trying to use a predictable set of rules in an unpredictable
market.

$DEBASE is a flexible-supply token that solves this problem by bringing true decentralisation to its
protocol, enabling flexible responses to unpredictable markets through the use of incentivised
‘stabiliser pools’. These allow for decentralised governance by enabling $DEGOV stakers to
decide which parameters the protocol should deploy and reward stakers that choose stabiliser pools
which successfully grow $DEBASE’s market cap and drives price towards the peg (1 DEBASE
= 1 DAI). This solves the last piece of Satoshi’s puzzle, by motivating users of the stable coin to
hold and use the currency when it deviates below the peg through ‘active and decentralised
management of supply change rules’.

Furthermore, the project is launching an innovative sister project $DEOR which can change the
way oracles are used in decentralised finance. $DEOR is a fully decentralised oracle network
solving the security and integrity issues typically common to their centralised or semi-centralised
competitors. This is achieved through a:

- ‘Custom Oracle Selection Tool’ that allows for the selection of nodes both manually or
autonomously through a randomiser, reducing the risks of Sybil attacks.
- ‘Reputation System’ that enables users to rate on oracle providers and nodes, allowing for
evaluation on the future use of the same by the network.
- ‘Secure Data Aggregation’ from several different sources to mitigate impact of
abnormal/anomalous data sources.