CAPITAL ADEQUACY RATIO(CAR), a risk management initiative
We will be building a fund in BTC that will be the basis of computing for the capital adequacy ratio (CAR) .
We target at least 10% of the market capitalization of XPH which will be maintained in BTC. (BTC fund/market cap in BTC = CAR, at least 10%)
We will be selling our forging rewards and donated XPH for BTC. And immediately put a buy order on the same cost that it was sold. The fund will be held initially at the exchange.
Regular reports will be made on these transactions.
This is in line with building soft infrastructures of our alternative financial ecosystem, which necessitates a risk management framework, for the community.
Maintaining a high CAR will be an initiative of Phantom Research Group.
We hope that a BTC fund will give confidence to tokenholders to avail the utility of XPH and the Blockchain as there will be a more stable reference value for peer-to-peer transactions and at the same time assures liquidity of XPH.
In our paper entitled “Introduction to Phantom Blockchain”, we said in the Post script, to wit:
- To clarify some ideas, see below:
The Blockchain is immutable, censorship-resistant and trustless. It means that: when a sender transfers 1 XPH through the Blockchain, another will receive 1 XPH. No third party guarantees the recorded transaction. 1 XPH is equal to 1 XPH.
- On the other hand:
The general acceptability for fairness of the recorded transactions on the Blockchain refers to a transaction that transfer 1 XPH worth 10USD, by the time another person receives 1 XPH, its value remains 10USD.
- Perception is very important. The validity of the value of the token (wealth) was upheld because, there is a community through a social consensus is attesting to the honesty and fairness of recorded transactions.
Having a computation for CAR and maintaining a BTC fund is a step toward to the abovementioned goal of “general acceptability for fairness of recorded transactions.”