CTRL+ALT+DEL
Currency de-peg
While pegging Tabs to fiat currencies gives them price stability, it also means Tabs will experience the same inflation as those currencies. For example, if the USD loses value due to inflation, the purchasing power of ⓢUSD will also decrease.
Although Bitcoin reserves can offset this inflation over time (since Bitcoin's increase in value allows more Tabs to be minted), this benefit primarily applies to users who mint their own Tabs. Others, who acquire Tabs through different means, won’t have the same protection.
Therefore, once a specific Tab has gained enough network effects, the goal is to de-peg from the fiat currency to eliminate its inflation effects. This de-pegging process is called Ctrl+Alt+Del.
De-pegging process
Initiation and approval: The de-pegging process begins with a governance proposal. Once approved, the value of the Tab is anchored to Bitcoin at the de-pegging price.
For instance, if the de-pegging price is 1 Bitcoin = 60,000 ⓢUSD, then 1 ⓢUSD will be worth 0.00001667 BTC.
Reserve calculation: The amount of Bitcoin required as reserves for the outstanding Tabs in each vault is calculated based on this new ratio.
Consolidation: All reserves are moved to a single protocol vault. Individual vaults will remain open for their owners claim any excess reserves.
Tab management: After de-pegging, minting and burning Tabs will occur only through the protocol vault, not individual vaults. The Minimum Reserve and Liquidation Ratios will no longer apply.
Practical impact
For every 1 ⓢUSD, the protocol vault will hold 0.00001667 BTC in reserve, which can be redeemed on demand.
Historical comparison
This system mirrors the Classical Gold Standard, where national currencies were defined by specific amounts of gold. For example, £1 was equal to 0.2352 ounces of gold, and $1 was equal to 0.0484 ounces of gold. This method reduced exchange rate volatility, increased currency transparency, boosted confidence, and lowered transaction costs, fostering international trade for many years.
Similarly, the Ctrl+Alt+Del de-peg aims to create a fair, stable, and transparent monetary system by anchoring Tabs to Bitcoin, providing a hedge against inflation and promoting long-term economic stability.
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