Cryptoeconomics is the fundamental layer of all blockchains and blockchain projects. It is about using economic incentives to design mechanisms that encourage people to participate in the network by behaving in a certain way, the economic way. Sandra from Ethereum Madrid will introduce the fundamentals of cryptoeconomics.
Using Ether or Bitcoin to operate a company or to buy products has one great disadvantage: the volatility of the currency. As it is impossible to know the price of Bitcoin or Ether for the next few days or months, it is risky to use them as a mean of exchange.
A stablecoin, which price would fluctuate as much as the major fiat currencies in circulation but without the volatility of the cryptocurrencies of today, would allow the ecosystem of blockchain-based organizations to pay wages and bills, borrow or raise capital in a more predictable and reliable way.
How are stablecoins issued, how do they acquire value, and how are they stabilised? How are decisions made to correct deviations and how to deal with crisis? What are the economic incentives that allow decisions to be made in favor of stability and personal profit at the same time? All of this in a decentralised fashion, while at the same time making decision-makers responsible?
Laurent and Sandra from EthereumMadrid will explain the stablecoin technology developed by Maker as an illustration of the concepts of cryptoeconomics.