I think I see where you are going with this, most pax coins will just trade for btc so no need to "unwind" (unlock)(recreate) them back to kmd.
Are there any quotes from the pax white paper that describe this in more detail, specifically this extra pool of kmd that will be used in case of a net shortfall, you can share?
Also, and this has got me thinking, what happens to the supply of kmd when the pax conversions start? Ie: How many kmd do you guesstimate will be locked/burned and unavailable once pax 1 starts? Pax2?
And say in a scenario where a small country decides to use pax and all of a sudden issues a few billion pax of the local currency, what does this do to kmd supply?
Thanks jl777
The pax paper will cover most things with more details. For pax1, I set aside a fixed amount of KMD enough to cover even the total meltdown scenarios. With pax2 the goal is a dynamically adaptive supply that manages risk within specified limits. Think of it as an automated self-insuring blockchain enforced supply.
For pax 1, the most KMD that is likely to be locked (burned) is several million. For pax2 I would like to be able to handle an order of magnitude more so I dont expect any reduced supply effect to affect price that much until pax2.
To handle a small country's usage, I would need to adapt the pax mechanism to create sidechains for this small country's currency. So N blockchains all DEX connected to each other, all using the same token.
Of course such large demand would dramatically reduce the freely available KMD, which is designed to have the effect of increasing its price so as to reduce the total that is needed to be locked (burned).
