I am thinking the possibility of using the notion of velocity of money to achieve the desired
economic stability of the network.
In the general theory the velocity of money is set as:
when
is the velocity of money for all transactions in a given time frame;
is the aggregate real value of transactions in a given time frame;
is the price level; and
is the total nominal amount of money in circulation on average in the economy (see “Money supply” for details).
In
our case
is Numbers of PUTs
is Price of PUTs
is the total Safecoin in circulation
Considering that all Safecoin is already distributed what we want is a stable system where is constant. (we can consider equal 1).
The network can only modify M as P and T are variables outside the network control.
So 1=PT/M or M=PT
If T (quantity of PUTs) increase P should decrease for that we increase M (total safecoin).
If T (quantity of PUTs) decrease P must increase, so we diminish M (total safecoin).
The M is controlled via the rate reward. This rate reward can be combined with the sacrificial rate and both control the stability of the system.
To accomplish this function the network must have available a significant amount of safecoin enough to allow control attack episodes or other situations.
What percentage should be? If we want to have an extremely secure network, 33% of the total safecoin in circulation could be a good number (the percentage could be agreed later).
At first, when the network is distributing new safecoin, the value of PT/M must be greater than one. The ideal is to establish a certain number of years of distribution and apply a formula (linear or logarithmic). In this way we know, at any time, the value that should have PT/M.