How do we prevent hyperdeflation?
In a deflationary environment, when speculators hold majority of the total token supply, velocity of Yupie transactions could get low, that it could be better to hold the token, thus tasks and our ecosystem gets stuck.
To prevent this, we want to introduce what we call the Yupie Stimpack system. We need to set parameters for this to happen and these are the first suggestions, which would utilize a two trigger system.
Velocity of the Yupie will be our first trigger warning which will be announced publicly. As you see from the equation below, is a simple way to monitor when the velocity (is number of transactions compared to tokens within system). As the number of transaction decreases, velocity slows down. We need to set precise thresholds together with you, on what is considered as too slow.
Velocity = Number of transactions/CS
*CS - Circulation Supply
This is a precursor warning before hyperdeflation occurs. Why did the DAO fail? It’s because of exactly this. Users wanted to hold so no token movement occurred. Learning from their mistakes we must present a solution. Thus, why we have trigger two in place.
Trigger two will go into effect when Yupie becomes hyperdeflationary. Below shows a hyperdeflation line drawing. The graph to the right shows ideal Yupie deflationary growth we want.
How the Yupie Stimpack works? After trigger 2 occurs, from our own Company Yupie pool, we present a lower price than the exchange for a specific period of time as agreed upon with the community. The ETH that goes into purchasing from the Yupie Stimpack becomes a pool of ETH that goes to our businesses for funding which will be chosen by the crowd. This in turn will stop the hyperdeflation and restart the economy, thus thriving Yupie movement.
The only way in the future to create a truly decentralized community we must invent and test policies for a true economy in a deflationary market. Give us your feedback on our two trigger system. Do you have ideas that could shape this? Research is needed on exactly when to act on trigger two. Do you have suggestions? When would be the right time for the trigger? We look forward to your feedback.