Why was ndau created?
- Three years ago, an anonymous group of early bitcoin enthusiasts and experts in fields including economics, monetary policy, cryptography, computer science and more came together to discuss the largest barriers to mainstream crypto adoption for long term holding. This group later became the ndau collective.
- The ndau Collective identified 23 different issues with cryptocurrencies today, and highlighted three key issues that needed a solution: volatility, dependability, and governance.
- The ndau collective believed these were the three largest barriers to using crypto as a long term store of value for both institutions and individuals.
- ndau was created as a solution to these three problems, with built-in economic constraints to help buoy the price based on demand, and a well thought-out governance system that allows for true decentralized and representative decision making.
What is ndau?
- ndau is a buoyant digital currency, built by Oneiro, to optimize for long-term store of value and which is supported by a decentralized ecosystem.
- Designed with built-in economic structures that incentivize both stability and potential for growth, ndau provides all the benefits of a digital currency while promoting more fair and accountable governance, dependability, and greater safety for owners not found in existing cryptocurrencies.
- Unlike stable coins, ndau is not pegged to fiat currencies or commodities, allowing for more desirable characteristics for long-term holders in particular.
- ndau is a completely unique blockchain (not an ERC-20 token).
How is ndau different from Bitcoin or other cryptocurrencies?
ndau is buoyant. This means that ndau is a free floating, digital currency that has the freedom to rise in value as demand warrants; however, its downside risk is mitigated by structural mechanisms that incentivize free market forces to support the market price of ndau at key distress levels.
Who created ndau?
ndau was created and designed by the ndau Collective (“the Collective”), a consortium of over 20 cross-disciplinary experts, developers, economists, and scientists. The Collective was established in 2015 as a distributed, autonomous group for the purpose of improving current cryptocurrency systems. Ultimately, with the goal of creating a global cryptocurrency designed and optimized for the long-term store of value.
What is the Blockchain Policy Council?
Created by the ndau Collective, the Blockchain Policy Council is a self-governing ecosystem, ultimately responsible for the governance and operating policies of ndau and is cryptographically accountable to the holders of the ndau. The BPC comprises nine delegates. The nine delegates consist of three different groups of three individual persons, with each group representing a different class of stakeholders. The three groups are: Initiators, Founders, and Holders. Each group is elected through different election protocols.
What is the Endowment?
The Endowment (from which “ndau” is named) is a not-for-profit entity that serves as a mechanism by which the BPC can enact monetary policy and stabilize the currency itself. The purpose of the Endowment is to hold the net proceeds from the release of reserve ndau and to use both to provide liquidity to the market by way of the Market Maker.1 The Endowment invests the net proceeds of its holdings according to rules and limits set forth by the BPC. These rules and limits best suit the long-term risk and return policy objectives of the BPC across the spectrum of possible investment environments in order to support a balance of growth and long-term market liquidity.
What are Ecosystem Alignment Incentives?
ndau holders are given the opportunity to earn additional ndau through Ecosystem Alignment Incentives or EAI. Technically, EAI incentives are available only to those holders operating or contracting a node. ndau held for longer than 30 days may be awarded an incentive of ndau at a rate of 2 percent on an annualized basis. As ndau is held longer, this rate increases in 1 percent increments each additional month up to 9 months, at which EAI is capped 10 percent thereafter.
What is Oneiro?
The Blockchain Policy Council has contracted with Oneiro to facilitate and manage the functions and operations required for ndau. Oneiro and its owned entities are directed by The Blockchain Policy Council and therefore is also cryptographically accountable to the holders of the ndau currency.
How is Oneiro funded?
Oneiro is financed entirely by COSIMO Ventures, a Venture Capital firm with offices in Boston, New York City, and Dublin. Oneiro owns and operates three companies that have the rights to manage the primary functions enabling ndau: mdici Capital, ntrd and ndev.
Why are there 5 different ndau prices?
1. The Target Price: The current price at which reserve ndau is sold according to the Target Price schedule.
2. The Sell (or ask) Price: The lowest price a seller is willing to sell ndau in the market (may vary across exchanges).
3. The Market Price: The Market Maker takes into account observable Buy and Sell Prices and filled orders across the ecosystem and combines them into a single published Market Price.
4. The Buy (or bid) Price: The highest price a buyer is willing to pay for ndau in the market (may vary across exchanges).
5. The Floor Price: The Floor Price is derived from the valuation of the Endowment and the current amount of outstanding ndau in a way that enables resiliency from currency attacks and serves to induce long-term dependability and liquidity. The Floor Price is dynamically calculated by dividing the Endowment’s total current value by the total number of ndau outstanding and multiplying it by 50 percent.
If ndau is not tethered to a commodity or fiat currency, how will it try to maintain a stable price?
- While no project can ever guarantee a particular price, ndau has economic incentives built into its ecosystem to encourage market interactions between ndau holders that tend to stabilize its price. Ndau holders are rewarded based on duration of holding.
- Ndau’s monetary policy automatically responds to market conditions in real time, releasing new ndau for sale from the endowment only when demand warrants and according to a public schedule of target prices that rise exponentially over time.
- Proceeds from ndau sales flow into an endowment of assets, which serves as a source of liquidity to support ndau monetary policy. The endowment is then used by the market maker to buy and burn surplus ndau.
- During market downturns, excess supply of ndau are taken out of circulation through both algorithmic mechanisms and by market makers, who buy back ndau at a dynamic floor price – similar to how central banks conduct open market operations, except more decentralized.
Why is there a need for a “buoyant” digital currency, and where do stablecoins fall short?
- While stablecoins are useful for crypto holders who want to make everyday purchases and rest assured that the value won’t fluctuate drastically, they are not ideal as a store of value. While stablecoins might be able to protect against downside volatility, they are unable to rise in value over time.
- Buoyant digital currencies incorporate monetary policy and supply and demand economics to help protect against downside volatility while pushing the price upward over time.
- Inflation: With digital currencies pegged to fiat currencies, such as the USD, holders run the risk of inflation each year that depreciates the value of the asset over time. Ndau is a superior store of value because its monetary policy can help keep the price stable, with the freedom to rise over time.
What is the price curve based on, and who created it?
- The ndau price curve is based on the S-curve that underpins conventional understanding of technological adoption. That price curve describes the rate at which new innovations are embraced by the population, and is segmented into stages of adoption including innovators, early adopters, late adopters, and laggards.
- The ndau price curve was designed by the ndau collective at ndau’s inception. ndau’s monetary policy is structured to correct for deviations from this curve, in which the market price falls above or below the target price at that particular stage of adoption
How is ndau governed?
- ndau is governed by a nonprofit, established by the ndau collective, called the Blockchain Policy Council (BPC).
- The BPC oversees all other parts of the ndau ecosystem, which consists of three key entities: the endowment (for which ndau is named) the development organization that builds and maintains ndau’s blockchain, and the market maker, which carries out open market operations to help stabilize the price of ndau as demand warrants.
- The BPC comprises nine delegates, each of which consists of three different groups of three individuals, which each group representing a different class of stakeholders. Those three groups are Initiators, Founders and Holders. Delegates are continuously elected by all ndau holders.
What types of incentives are in place to guide interactions between ndau holders or to help stabilize the price of ndau?
- ndau includes built in incentives called the Ecosystem Alignment Incentives (EAI) that reward holders with additional ndau based on the duration of their holding time.
- ndau also includes an incentive called Stabilization Incentive Burn (SIB), which dissuades holders from selling their ndau during down markets by tacking on an additional fee for selling or moving ndau off the ndau blockchain. This additional fee is removed from circulating supply permanently, or “burned”.
What are the use cases for ndau?
- ndau is designed specifically to be a long term store of value – making it ideal for many use cases for both public and private institutions and individuals.
- It is ideal for retirement accounts, pension funds, collateral accounts, bank reserves, and other purposes that would require a dependable, long term store of value that can increase over time.
- ndau is also a safer medium of purchasing tokens during an ICO for both companies and investors. Its lower volatility than BTC and ETH make it an ideal long term store of value for blockchain projects post-ICO.
Why is ndau burned?
ndau has a unique feature known as the Stabilization Incentive Burn (“SIB”) system to mitigate downward volatility. When the Market Price of ndau drops to 5 percent below the Target Price, the SIB activates. The SIB is a fee that is applied on top of normal transaction fees. The SIB rate progressively increases as the Market Price approaches the Floor Price, and the ndau collected through the SIB fee are permanently removed from circulation.
The SIB begins at 0 percent when the Market Price drops to 5 percent below the Target Price and climbs to 50 percent as the Market Price approaches the Floor Price. The SIB reduces the incentive to sell during down market conditions because the cost to do so grows higher the more the market declines.