SagaCoin™ powers transactions across the SagaChain™ – so we have defined a unique and advanced algorithm to control SagaCoin™ supply and appreciate / maintain purchasing power – avoiding volatility and providing a robust and reliable currency.
SagaCoin™ Management Model (tokenomics)
The overall goal is at first to increase and ultimately to stabilize the Purchasing Power (PP) of SagaCoin. PP means how many bundles of goods one SagaCoin will purchase in the market.
PP will initially be measured by deflating dollar price by a combination of dollar price indices (CPI, GDP deflator, PCE).
The SagaCoin Management Model provides dyanamic adjustment of supply in response to ebbs and flows in transaction demand.
Launching into algorithm to control coin supply and stabilize purchasing power
Milk is currently about $4 a gallon. That would be 400 SagaCoin based on an assumed initial value of $0.01.
At the end of the appreciation phase (Stage II), assuming 200x appreciation together with a cumulative 10% inflation in all dollar prices, the same gallon of milk (now $4.40) would cost only 2 SagaCoin.
After that, during the mature “flattened” stage (Stage IV), a basket of goods would continue to cost the same number of SagaCoin despite ongoing dollar inflation.
A historical scenario
SagaCoin™ purchasing power and supply (had it launched in 2016).
Purchasing Power (PP)
The purchasing power of SagaCoin™
Supply Expansion (GMT)
% expansion of SagaCoin™ in quarter by net mining
SagaCoin™ Supply (SCS)
The amount of SagaCoin™ in circulation
More about SagaCoin and Purchasing Power
To help understand how SagaCoin Purchasing Power is related to a SagaCoin price, i.e, our goal is to appreciate the purchasing power of SagaCoin by 237X, this does not mean we are predicting a $2.37 exchange rate for SagaCoin, that is up to the market and we cannot forecast (that is against securities laws).
Here is what ChatGPT says about:
Q: What is relation between currencies price and a currencies purchasing power
The relationship between a currency’s price and its purchasing power is often linked through the concept of exchange rates and inflation.
Exchange Rates: The “price” of a currency in terms of another currency is known as the exchange rate. Exchange rates determine how much one currency is worth in terms of another. If the exchange rate between two currencies changes, it can impact the relative value of those currencies.
Purchasing Power: Purchasing power refers to the amount of goods and services that a unit of currency can buy. In other words, it measures the real value of money in terms of what it can actually purchase.
The relationship between these two concepts is affected by inflation:
Inflation: Inflation is the general increase in prices of goods and services over time. When a country experiences inflation, the purchasing power of its currency decreases. This means that the same amount of money will buy fewer goods and services. Inflation erodes the value of a currency over time.
Exchange Rates and Inflation: If one country has higher inflation than another, its currency’s purchasing power will decline faster relative to the other country’s currency. This can lead to a depreciation of the currency’s exchange rate. In other words, the currency with higher inflation would weaken compared to the currency with lower inflation.
For example, if Country A has a high inflation rate compared to Country B, the currency of Country A will experience a decrease in purchasing power. This could lead to a situation where the exchange rate between the two currencies changes, and the currency of Country A becomes worth less in terms of Country B’s currency.
Conversely, if a country maintains lower inflation, its currency’s purchasing power tends to remain more stable, and the exchange rate with other currencies might not change as drastically.
It’s important to note that various economic factors, including interest rates, economic growth, trade balances, and geopolitical events, can also influence exchange rates and, consequently, impact the relationship between currency prices and purchasing power. Additionally, the relationship can be complex and influenced by both short-term and long-term factors.