| cover | .gitbook/assets/twibg 2.jpg |
|---|---|
| coverY | 0 |
Pinto is low-volatility money with a $1 price target.
The term stablecoin gives people the wrong idea. Whereas sufficiently collateralized stablecoins are in fact stable coins, they are not money. Money has endogenous value and is volatile in nature. Our goal is to create money with endogenous value because of its censorship resistance, capital efficiency and low volatility.
The stablecoin trilemma states that censorship resistance and capital efficiency (i.e., low carrying costs) come at the cost of ideal price stability. However, there is certainly some sufficiently low level of volatility below which a censorship resistant money with competitive carrying costs would compete with centralized stablecoins.
Stablecoin out. Low volatility money in.
Credit is the ideal tool to minimize volatility because it (1) enables using future value in the present, (2) is infinitely scalable, and (3) does not require a leviathan. During periods of excess supply (i.e., insufficient demand), Pinto uses credit to call forward future demand to the present. In practice, the protocol borrows Pinto from the market and then burns the borrowed excess Pinto to decrease the supply, thereby reducing downside volatility. During periods of excess demand (i.e., insufficient supply) the protocol mints new Pinto and pays back creditors with interest, thereby reducing upside volatility. The more debt Pinto repays with interest, the more (1) creditworthy it is perceived, (2) it can borrow at lower interest rates, and (3) it can sustainably reduce future downside volatility.
Pinto is an experiment. Before interacting with Pinto, consider reading the Disclosures.