Featured Story 17 — A Different「DFINITY」| What is SDR in DFINITY?
Hayek, the Nobel laureate in economics, mentioned in his book “Denationalization of Currency” that currency plays the role of an accounting unit and is a medium of exchange. The more stable its value, the better. DFINITY applies this theory to the exchange of Cycle.
In order to ensure the long-term stability of Cycle, DFINITY introduced the International Monetary Fund’s SDR (Special Drawing Rights) method, which is to set up an exchange medium XDR. 1 XDR (currently about 1.43 US dollars) can be exchanged for 1 trillion Cycle, and the value of XDR is determined by a package of legal currencies such as US dollars, euros, and British pounds, so that the exchange rate is directly linked to the value of the global economy.
The Cycle that were initially exchanged through NNS may be sold in excess due to surplus, which in turn leads to a decrease in market value. But as the computing demand of Internet computers increases, Cycle will become more and more stable.
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