1-Explain why stability is important in digital currencies.
Digital currency was fisrt of all created with a lot of mistrust amongst people because most of the currencies never had stability as it's values were fluctuating on regular basis. So due to this mistrust issues, some digital currencies especially like USDT, USD and many others that are connected to the US dollars were created and made in such a way that it's values don't change that much
- Some of the advantages of this stable currencies is that people can hardly loss when they hold it because they are confident it's value will never rise nor fall. So people turn to trust this stable currencies with so much confidence
Another important aspect of stability in this digital currencies is that this stable coins are highly secured because one don't need to have fear that it may lost in it's value for it can't rise or fall like other digital currencies
Stable coins have low trsnsaction fees and are very cost effective and this coins turn to give traders and holders hope since it's value can't be tampered with.
stability is also important in digital currencies in that it's highly accepted and used worldwide
2-Do you think CBDC would be good in the future? Weigh the pros and cons in your own understanding and state your position.
First of all CBDC stand for Central Bank Digital Currencies and it will be good in future because it is always issued out by a Country's government to represent their currency and digital asset In other go enable exchanges and also purchased the Country's digital coin
Though this CBDC is good in future, it also has pros and cons which I will be discussed below because we all should always know that no matter how accurate something is, it most also have atleast one or two disadvantages
Pros of CBDC
since it's governed by the state, it therefore have a legal backing and can easily be accepted as a medium of exchange without questioning
Since it's centralized, there is no need of issuing or owning a bank account before doing any transactions. Therefore one can create his wallet only through the computer or phone then start doing trsnsactions with since it's an electronic model
It's medium of payment is relatively very fast and can trigger transactions within seconds.
It is highly accessible because the platform doesn't need to own a bank before getting access in performing trsnsactions
Cons of CBDC
Since it Function as a centralized system, all our trsnsactions are quit exposed for everyone to see hence leading to no privacy which can be dangerous because your enemies may know alm the amount of coins you have then attack you
it is so dependent on the bank since it's assets are in control by higher people since it's Cryptocurrencies have been kept on a centralized platform
CBDC can only be transacted and issued only in the country that accepts it's legal backing
It has a great technoligical effect on most people especially in a rural area because they will face difficulties in performing trsnsactions in the platform due to no electricity or most of them don't even have a smartphone or a computer
3-Explain in your own words how Rebase tokens work. Give an illustration.
Rebase tokens are adjustable stable(neither decrease nor increase In it's value) coins that obtain a fixed price of an asset by arranging the number of their supply with that of the fluctuating price of the particular asset by the help of of a rebase mechanism.
Since the rebase token doesn't increase nor decrease in its price, it can therefore be use to trigger a change In the circulating supply in any circumstances there is any increase or decrease in the value of the token. So this rebase token Always try but to decrease or increase the number of tokens the holder hold but maintain the same price
Example
A person keep or hold $200 worth of rebase token let's say luna. This implies the $200 is equivalent to 200 LUNA token. Okay now, if it occurs that the price need to change by adjusting the market value negatively, therefore, for the $200 to reduce in worth let's say $198, the coin amount will Instead be the one to reduce from 200 to 198.7 Luna token
4-Go to https://www.ampleforth.org/dashboard/. Check the required parameters and calculate the% overshoot. What else can you find on the page?
Screenshot from AmpleforthTaking into consideration the figures from my Screenshot, I go proceed by calculating AMPL's rebase by using this formula stated below 👇
Rebase % = {[(Oracle Rate - Price Target) / Price Target] x 100} / 10
But my parameters are,
Oracle Rate = $1.022
Price Traget = *$1.061
I then need to use the rebase formula to substitute my values as seen below 👇
Rebase % = {[(1.022 - 1.061) / 1.061] * 100}/10
Rebase % = [(-0.039 /1.061) * 100] /10
Rebase % = (-0.037 * 100)/10
Rebase % = 3.7 /10
Rebase % = -0.37%
B) What else can you find on the page
Screenshot from Ampleforth
Screenshot from Ampleforth
Screenshot from Ampleforth
Screenshot from Ampleforth
5-Trade some tokens for at least $ 15 in USDT on Binance and explain your steps.
I will log into my Binance account and trade on the pair of TRX/USDT
So I will log into my Binance account then go to market and choose trade then select my pair of TRX/USDT
After filling the Market order, it instantly execute it as seen below
6-Transfer the USDT to another wallet with Tron Network. From the transaction, what are the advantages of stable currency over fiat money transactions? (Give a screenshot of the transaction).
After going to my trust wallet account, I had to search for a pair of USDT and TR20 then click and copy it's wallet address then went back to my Binance account and went to wallet then clicked on the USDT then after I click on withdraw then also fill the the details.
After doing so, I will fill in two codes in other to finish my trsnsaction. Of the two codes, one was send directly to my email address while the other one to my phone number in the form of SMS. I then proceeded as the trsnsaction took me some few minutes to to be processed when I submitted it
My trsnsaction was finally completed as my trust wallet account was now funded up
Below is the demonstrations through Screenshots👇
advantages of stable currency over fiat money transactions
1: The stable currency trsnsactions are relatively very fast than fiat trsnsactions because I notice my USDT already reflected within seconds after which I had confirmed in my Tronlink wallet
2: Stable currency also have very little fee charges during transactions over Fiat Transactions
3: It possesses a higher security level during transactions than that of FIAt Money during transactions because I notice an sms that was send both to my number and Gmail for me to confirm my transaction if truely I'm the one doing it
We have seen how stability is extremely important in Cryptocurrencies mostly is it is highly secured and legally accepted by many government. We have also noticed that people will hardly lost it even when they hold it for long because it's value can't be relatively high or low unlike other currencies they usually rise or fall massively in it's value
We have also seen that rebase tokens are adjustable stable coins that obtain a fixed price of an asset by arranging the number of their supply with that of the fluctuating price of the particular asset by the help of of a rebase mechanism and we have also seen how to calculate it
Thanks so much profesor @awesononso for beautiful lessons for it has Wilden my mind greatly
CC:
NB: all Screenshots for question 5 and 6 are taken from my Binance and trust wallet account respectively