If you build something and then say “try and break this”, that should raise an eyebrow.
Things that are “antifragile” defy the ability to be broken. They gain strength even in the fog of disorder.
So what would an antifragile stablecoin look like?
Such an asset would have to be prepared for any black swan. More than just surviving any possible macroeconomic scenario, it must be able to adapt to and thrive in that environment.
It seems the key to an antifragile asset comes down to this: a flexible basket.
You might have read my recent piece on the history of basket pegged assets. It makes sense that a well-woven basket gives an asset the ability to absorb more volatility than a single currency. But no one has ever built a basket that can flex via governance — until Silk.
Some stablecoins are looking at a mean bully named Macro and hiding behind the houseplant in the corner. Silk walks to the middle of the room, goes toe-to-toe with Macro, flexes its abs, and says, “please punch me as hard as you can.”
Please, imagine a macro scenario that would break Silk. We dare you. Let’s look at a few scenarios:
Scenario #1 — Owning any cryptocurrency is strictly outlawed
How does this impact the stability of Silk? Well, quite frankly it doesn’t. If the US, for example, has a Central Bank Digital Currency (CBDC) in 2030, that would likely be a part of Silk’s basket and assigned carefully a weight within the peg index. But the good favor of any particular government isn’t a part of the peg. The index is engineered around global stability not government sentiment.
Widespread National bans force crypto users to weigh their economic needs and choices against their national citizenship. That’s a sad choice to say the least. But Silk would survive the scenario and still likely lay claim to being the most stable asset on the planet.
Scenario #2 — Ecological Resources are High Value Digital Assets
Suppose it is 2070 and we still haven’t figured out the whole sustainable bioeconomy thing. Nature and people are paying the price for these unsustainable practices. (Please remember, imagining this scenario doesn’t require your political assent for a green agenda, just your imaginative assent that such a world is possible in 2070.)
Due to complex factors such as desertification, soil depletion, erosion, rising oceans, climate refugees, increased flooding, deforestation, and shrinking biodiversity — in this version of 2070 the most valuable assets on earth have become natural resources. Through projects like Regen Network, we are able to validate, digitize, and have consensus around ecological assets like land health, trees, biodiversity, carbon drawdown credits, and more.
In such a world, Shade’s DAO could weigh the merits of including ecological assets in Silk’s basket. Because remember, the beauty of Silk’s stability is that it can change it’s anchor points to whatever is most stable and valuable in the global economy. Bend the US dollar too much, USD pegged stables break. Bend the US dollar for Silk and it absorbs and flexes. Silk’s resiliency lies in its adaptability to any future scenario.
Scenario #3 — Mass Crypto Adoption
Now let’s have some fun with the most preferable of our three scenarios. It’s 2030 and the total crypto market cap is $150 trillion. Wow. I want to go to there.
Bitcoin dominance has tapered to 20% alongside a flourishing expansion of the cryptosphere. So the MC for BTC is $30 trillion. The majority of the world’s nations hold some Bitcoin. And for the sake of this scenario, let’s suppose that many people use BTC for everyday personal transactions (though I have contended elsewhere that this likely will not be the case).
In such a scenario, Bitcoin would have a well-deserved case to play a larger role in Silk’s index. Per Shade Protocol’s governance mechanisms, this decision would be proposed, discussed, debated, and voted on. Silk peg decisions belong to those who care about it: Shade and Silk holders.
Can You Break Silk?
Whether the global economy is oriented around Butterfinger candy bars or the new Antarctic Snow Dollar… Silk can build an appropriately weighted basket that mitigates volatility and assures stable value.
Now, you put Silk to the test.
Imagine a global scenario. How would Silk flex its basket to hold value in that environment?
Is the need, use case, and stability of Silk still intact?
If you can uncover a black swan scenario that breaks $SILK (outside of human extinction) and I’ll pay you 100 $SHD.
Part of how you build something great is by trying really hard to break it and see how it fares. Hey, you can even pull out a tin foil hat for this part! Are there any black swans or basket cases where Silk would appear not to function?
If you’d like to check out Silk’s current peg visit here
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