The Responsive Dollar

How the protocol combats inflation.

1 RAM is equal to 1 USD based on a 2020 USDs purchasing power. We accomplish this by looking at what 1 USD can purchase today in terms of major commodities across the globe and averaging them all together weighted by volume.

Lets take a look at corn which is denominated in bushels.

1Bushel=115.21USD1 Bushel = 115.21 USD
1RAM=1/115.21=0.008679Bushels(pC1)1 RAM = 1/115.21 = 0.008679 Bushels (pC1)

This is then averaged against other commodities weighted by its global trade volume. So lets add another commodity gold which is denominated in troy ounces and goes for $1,951.50/troy ounce.

1RAM=1/1951.50=0.000512426toz(pG1)1 RAM = 1/1951.50 = 0.000512426 t oz(pG1)

Now if the price of corn went up 2% and the price of gold went up 5% the new RAM value would be an average of the two weighted by their daily volume.

Corn's new price would be 1/117.5142 = 0.008509(pC2) with a daily volume of 439,357(vC) @ 117.5142/bushel (pC2)

If we stopped here 1 RAM would now equal 1.02 USD because (0.008679/0.008509 = 1.02) We aren't basing this on a single commodity however.

Golds new price would be 1/2049.075 = 0.00049 (pG2) with a daily volume of 234,363 (vG) @ 2049.075/t oz (pG2)

((pC1/pC2)(vCpC2)+(pG1/pG2)(vGpG2))/((vCpC2)+(vGpG2))((pC1/pC2) * (vC * pC2) + (pG1/pG2) * (vG * pG2) ) / ((vC * pC2) + (vG * pG2))

This equation gives us RAMs new USD value being 1.0471