What is MahaDAO (MAHA) | What is MahaDAO token | What is MAHA token
To combat the spiral of decline, we at MahaDAO set about a mission to correct this systemic flaw, tasking ourselves to design and create an asset that protects the buying power of the holder.
Introducing ARTH, a decentralized non-depreciating algorithmic form of currency, that ensures stability in buying power over time as opposed to stability in price. In this article, we outline the ARTH coin and its mechanism, but firstly what is MahaDAO?
MahaDAO: A new way
MahaDAO is a decentralized autonomous organization that is governed by the MAHA community. The MAHA token holders are at the helm of all decision making and play a central role in fulfilling MahaDAO’s true potential.
MAHA: The governance token
MAHA, as the name signifies, refers to a supreme, magnanimous, greater than itself characteristic, which the MAHA governance token embodies. Community members use MAHA to vote on key aspects of the ecosystem in order to collectively manage the parameters that keep ARTH stable and in check. In short, MahaDAO is guided by the MAHA holders, who determine the various activities and updates within the ARTH ecosystem.
The primary responsibility of all MAHA token holders is to ensure the stability of the ARTH valuecoin.
ARTH: The valuecoin
ARTH is the world’s first valuecoin. Every time users stake their volatile collaterals in a CDP, they generate more value stable ARTH coins. ARTH is an absolute unit of measure that maintains the buying power of the token holder, irrespective of which direction the market moves and is backed by stable uncorrelated assets.
ARTH is a viable successor to stablecoins, which in themselves are depreciating as discussed earlier in this article.
What is a valuecoin & how does ARTH ensure its value remains stable?
Simply put, a valuecoin is a currency that is stable not in price but in value. As opposed to a stablecoin, a valuecoin never erodes its intrinsic buying power. If a cup of coffee costs 2 ARTH today, it would cease to cost higher in the future. It will cost 2 ARTH 5 years, 10 years down the line, if not less.
We’ve reengineered the reserve vault introduced by MakerDAO, with some key changes to create a valuecoin that maintains buying power rather than a stablecoin pegged to a depreciating currency. The vault acts as a regulator, managing the underlying collaterals locked in, used to generate and back the ARTH token.
In the example below, we posit a straightforward scenario in which we base ARTH on a 1:1 weighting of two assets, A being USD and B as GOLD, both measured against CNY over the last 3 years.
In this example, we can see the price of USD increasing, whilst gold fluctuates. Here, the vault automatically rebalances to its true value by selling off the excess USD for gold, signified by the gradual decline in ‘A held quantity’ for an identical uptick in ‘B held quantity’.
In comparison to MakerDAO, which mints new DAI as the asset appreciates, our mechanism uses this increase in value to buy more of the underlying collaterals, thereby reinforcing ARTH with this extra value. As in the example, our vault’s algorithm is up 40% after inflation.
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