A New Era for Money: Decentralised Digital Stable Currencies (DDSCs) and Gaugecash

The financial landscape is undergoing a profound transformation, driven by the advent of blockchain technology. This innovative technology has spawned a plethora of new asset classes, each with its unique characteristics and potential applications. Among these, Decentralised Digital Stable Currencies (DDSCs) stand out as a promising innovation that could revolutionise the monetary system.

Navigating the Diverse Landscape of Blockchain Assets

Before delving into the concept of DDSCs, it is essential to grasp the diverse range of blockchain assets that currently exist. These assets can be broadly categorised into six main types:

Pegged Stablecoins

These digital assets are pegged to an external reference currency, typically a fiat currency like the US dollar. Their stability makes them attractive for everyday transactions and hedging against market volatility. Examples include USDT, USDC, and DAI. Most pegged stablecoins rely on third-party reserves, creating a dependency on a centralised entity, called third-party risk. This can lead to reserve mismanagement and liquidity crises. Gaugecash, being a decentralised asset, is immune to such risk.

Algorithmic Stablecoins

These digital assets employ complex algorithms to maintain their value, rather than relying on external pegs. They aim to achieve stability through a combination of token creation and destruction mechanisms. Examples include Ampleforth (AMPL) and Terra (UST). Algorithmic stablecoins are susceptible to manipulation by market parties that can destabilise the algorithm with high-volume, high-speed transactions. The crash of the Terra/LUNA system showed this vulnerability in a painful way. Gaugecash's decentralised design and intrinsic value shield it from manipulation.

Decentralised Volatile Assets

These digital assets, represented by cryptocurrencies like Bitcoin and Ethereum, are characterised by their price fluctuations. While their volatility poses risks, they also offer the potential for significant returns. Decentralised volatile assets are volatile by nature due to their dependency on (limited) supply and demand. Scarcity increases this volatility. As a result, these assets may be less useful as money in its traditional sense of value store and means of transaction. But it is a fact that so far speculation has created a lot of stable, long term demand in assets like Bitcoin.

Tokenised Assets

Real-world assets, such as stocks, bonds, and real estate, are represented on blockchains as tokenised assets. Their tokenisation enables fractional ownership, enhanced liquidity, and easier global accessibility. While tokenised assets offer fractional ownership and liquidity, they come with an inherent third-party risk. Holders of such tokens need to trust these third parties.

CBDCs

Central Bank Digital Currencies (CBDCs) are digital versions of fiat currencies, issued and controlled by central banks. They aim to enhance financial inclusion, reduce transaction costs, and streamline cross-border payments. Some CBDCs may raise privacy and surveillance concerns due to their centralised nature. DDSC’s, with their decentralised design, offers greater privacy and anonymity.

Other Blockchain Assets

This category encompasses a diverse range of blockchain assets, each with unique functionalities and applications. Examples include privacy coins like Monero and Zcash, and specialised tokens for specific platforms or protocols.

Decentralized Digital Stable Currencies (DDSCs): A Paradigm Shift

DDSCs represent a novel approach to monetary stability, combining the decentralised nature of blockchain with the stability of reliable money. Unlike traditional pegged stablecoins, DDSCs are immune to government interference or manipulation.

DDSCs are a type of digital asset that aims to provide and even surpass the stability of traditional fiat currencies while maintaining the decentralised nature of blockchain technology. They are typically pegged to a basket of assets such as currencies, ensuring that their value remains relatively consistent over time. This contrasts with traditional cryptocurrencies, which lack intrinsic value and hence are subject to significant price volatility.

Gaugecash: The Pioneering DDSC

Gaugecash stands as the world's first and only operational DDSC. Its unique index-based mechanism ensures long-term stability and protection against inflation. The Gaugecash Monetary System offers a high level of purchasing power protection, arguably and objectively better that any traditional currency can offer. And this advantage comes without the volatility risk that speculative safe havens like Gold or Bitcoin bring along. The chart plotting the index value against USD and other currencies since the year 2002 shows the effectiveness of Gaugecash.

How Gaugecash Works

At the heart of Gaugecash lies the GaugeIndex, a weighted average of 35 freely tradable world currencies. Information on these currencies is fed into the blockchain by a decentralised network of oracle nodes. The index is further enhanced with a mathematical protection against hyperinflation and a 2% annual compensation against monetary inflation. The index value directly sets to the nominal value of the Gaugecash (GAU) currency.

So the Gaugecash Monetary System comprises two interconnected assets:

Gaugecash (GAU): A stable asset designed for both payments and store of value. Its value is pegged to a diversified index of 35 fiat currencies, providing protection against exogenous shocks.

Gaugefield (GAUI): A deflationary investment asset that serves as a complementary component of the Gaugecash Monetary System. Its value is driven by a combination of scarcity, demand, and the growth of the Gaugecash ecosystem.

Gaugecash's intrinsic value stems from its deflationary Gaugefield token (GAUI), which provides liquidity to the system by wrapping scarce assets on the blockchain. It thus creates an on-chain reserve.

Both GAU and GAUI share the same liquidity pool. In this way both assets strengthen the intertwined system. It is designed in such a way that by being used it creates its own liquidity. This design enables both small and large transactions in a smooth manner.

Gaugecash's decentralised infrastructure and agnostic nature to blockchain technology make it future-proof and resilient to changes in the technological and monetary landscape. It operates independently of governments and central banks, ensuring true monetary sovereignty and predictable value.

Gaugecash: A New Approach to Monetary Sovereignty

Gaugecash offers a compelling alternative to traditional fiat currencies, offering several advantages:

Enhanced Stability: The Gaugecash Monetary System's index-based peg and decentralised structure provide greater stability compared to traditional fiat currencies, which are susceptible to government policies and central bank actions.

Monetary Sovereignty: Gaugecash holders retain full control over their assets, free from the influence of governments or central banks. This empowers individuals to manage their finances independently.

Low Volatility: Gaugecash's stable asset, Gaugecash (GAU), offers a low-volatility alternative to traditional cryptocurrencies, making it suitable for payments and long-term investment.

Global Access: Gaugecash is accessible to anyone with an internet connection, regardless of geographical location or geopolitical considerations. This facilitates cross-border payments and financial inclusion.

Investment opportunity: The Gaugefield (GAUI) token is scarce by design. Its value appreciation over time offers a strong case for investment.

Quintessence: A New Era of Monetary Stability

The evolution of blockchain assets has opened doors to innovative solutions like DDSCs. Gaugecash, the world's first operational DDSC, exemplifies this potential, offering a reliable, accessible, and predictable digital currency that aligns with the original essence of money: A reliable store of value and an efficient and practical means of payment. As the blockchain revolution continues to unfold, DDSCs are poised to play a pivotal role in shaping the future of finance.

For further information please consult the Gaugecash Whitepaper on https://gaugecash.org

The articles in this series:

1. A New Era for Money:?https://www.dhirubhai.net/pulse/new-era-money-decentralised-digital-stable-currencies-kai-pf%2525C3%2525A4hler-xkwme%3FtrackingId=tvxlouBqRmuK5w6N3m9mrw%253D%253D/?trackingId=tvxlouBqRmuK5w6N3m9mrw%3D%3D

2. Invest in the Future of Money with Gaugecash: https://www.dhirubhai.net/pulse/invest-future-money-gaugecash-worlds-first-monetary-kai-pf%2525C3%2525A4hler-bh0ge/?trackingId=TesvSTQSSNeeDWBjDsxfJg%3D%3D

3. Gaugecash, the next revolution after Bitcoin:?https://www.dhirubhai.net/pulse/gaugecash-next-revolution-after-bitcoin-kai-pf%2525C3%2525A4hler-8v1we/?trackingId=XRQS534JQgaQ6Z5pncTqyw%3D%3D

4. The Maze of Stablecoins Demystified:?https://www.dhirubhai.net/pulse/maze-stablecoins-demystified-kai-pf%C3%A4hler-8qxkf/?utm_source=share&utm_medium=member_ios&utm_campaign=share_via