Got lost on Discord – EC query

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Got lost on Discord – EC query

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Can someone explain to me how the floor price for FCT works. I’ve looked at the speculator’s calculator and if there were 24 billion entries per day, the monthly EC usage would be 730 billion and the FCT price required to balance out the 73K Factoids created would be $10K. Presumably, if no speculation premium is applied and the market doesn’t value this theoretical ‘floor’, you could enter the realm of deflation? For example, with the volume figures quoted in mind, if the FCT price was $1K, the monthly deflation would be 657K FCT. I guess the system would have to re-balance quickly as the rapid deflation would cause a shortage of supply, and the discrepancy in terms of measurable undervaluation, would increase demand, hence pushing the price up to a more reasonable level? This would then slow down and eventually stop deflation? Looking at the calculator, any speculative premium on top of the floor price will always equate to inflation of at least a certain extent? For instance, with the same volume figures in mind, if the FCT price was $20K, inflation would be 36.5K per month. One would expect that the eventual oversupply will cause supply to outstrip demand and the price will then reduce accordingly? Both these effects serve to achieve some level of equilibrium, with flexing either way constrained by market dynamics? Is this it in a nutshell? Never really delved as deeply as this so just want to make sure that I’m understanding it correctly. I suppose for now we don’t have real dynamics in play due to the absence of usage, which means that we are inflating big style month on month? Probably close to 73K FCTs? So, if usage doesn’t go up significantly in the next year, we’ll have an extra 1 million FCTs in circulation?…..if so, then yikes! That tied to ANOs and guides wanting to sell high numbers of FCT could have a real killer effect on the FCT price right? Current floor price is about 0.04 cents per FCT based on my crude calcs – assuming 30,000 ECs used per month – so present price is almost 100% speculative! We need volume ASAP.

submitted by /u/PedroPierrePeter
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Got lost on Discord – EC query