# 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.

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

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.

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

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)

$((pC1/pC2) * (vC * pC2) + (pG1/pG2) * (vG * pG2) ) / ((vC * pC2) + (vG * pG2))$

This equation gives us RAMs new USD value being 1.0471