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Cardano is investigating ‘Stablefees' for cheaper cryptocurrency transactions.

The basic idea behind Stablefees, as stated in the blog post, is to offer a base price for transactions by pegging to a basket of commodities. The post goes on to provide a comparison example relating to the fiat world


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Devendra Singh Khati

3 years ago | 2 min read

The Cardano (ADA) team has begun to investigate the feasibility of “Stablefees,” which would set a base price for crypto transactions.

IOHK, the company behind Cardano, stated in a blog post today that future Stablefees would provide transaction pricing that is both fair and predictable. Cardano hopes to leverage its current platform's ledger guidelines and system assets approach to easily integrate Stablefees.

The Stablefees mechanism consists of a native decentralised reserve contract that manages a stablecoin called Basket Equivalent Coin that is pegged to the basket (BEC).

Adjusting transaction costs

IOHK believes that transactions on traditional crypto platforms fail due to the platform's linked asset's dual utility. According to the post, on one hand, users can hold and trade it, while on the other, it provides the “necessary fuel for processing transactions.”

The current system, according to IOHK, should be updated to include a mechanism that allows transaction costs to be adjusted while remaining reasonable. According to the post, the system should also allow users to find the correct price for “timely transaction processing.”

While the blog raises the possibility of eliminating fees entirely, it cites three reasons why this is not a viable option. For starters, it is unreasonable to expect stake pool operators to bear 100 percent of their costs.

Second, even if the network has infinite capacity, it is critical to avoid network saturation with unnecessary transactions. Finally, they believe that incentivizing transaction processes to provide the highest quality of service is critical.

The implementation of Stablefees

The basic idea behind Stablefees, as stated in the blog post, is to offer a base price for transactions by pegging to a basket of commodities. The post goes on to provide a comparison example relating to the fiat world:

Cardano will be working double shifts in this new system, taking on dual roles. ADA will serve as a decentralised reserve asset as well as a reward currency for staking. In addition to its primary functions, ADA will serve as the reserve contract's "fall-back currency" in the event of a liquidity crisis.

According to IOHK, once the granular details of the Stablefees mechanism have been thoroughly researched, they will be integrated into ADA to provide the fair and predictable pricing promised in the post. They go on to say that the price oracle and global (BEC) will most likely find uses other than just paying fees, further expanding the Cardano ecosystem.

Note: ada to inr trading pair is now live on BuyUcoin @0% fess on OTC desk.


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Devendra Singh Khati

As a writer and copywriter, I've recently focused on making blockchain more accessible to those who are unfamiliar with the technology. As someone who has been around for a while, I understand how difficult it can be to avoid technical jargon when explaining any blockchain concept.


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