Vision and value
Malt firmly believes fairness, community and progressive decentralization are the keys to unlocking a sustainable algorithmic stablecoin with correctly aligned incentives.
The core philosophies we embrace in the way we build are:
- 1.Incentives are the most important thing in any economic system. All design choices must be filtered through the lens of the incentives they create.
- 2.A complex system that works is invariably found to have evolved from a simple system that worked. The inverse proposition also appears to be true: A complex system designed from scratch never works and cannot be made to work. You have to start over, beginning with a working simple system.
Gall's law is the reason why we have chosen to build a per pool stabilization system rather than a global one. By focusing on each pool individually the complexity of the problem is limited in scope. The sum of many of these simple systems should then recover the complexity of global stabilization without having to directly solve for it.
The goal is to make a stablecoin that can serve as the backbone of DeFi. The goal is to prioritize community over insiders because any other way of doing it has strange incentives that could compromise quality and longevity.
We designed Malt from the ground up by thinking about all players in the system and the incentives they have. Rather than shunning speculators as a nuisance to the protocol we embraced them as the core engine. Create native incentives for the speculators that align with the protocol's main goal of maintaining a peg and you have a system that can last.
There are no insiders with an allocation they can dump for short term profit. That wouldn't be fair to the community and won't be best for protocol stability. So we removed it. Even the team has to buy Malt like everyone else.
We have no governance token initially because
- 1.Starting with fully decentralized governance from the start is incredibly hard.
- 2.Governance tokens are an easy way to produce massive wealth very quickly for the founders / insiders before they have developed the product.
- 3.Governance tokens allow hoarding of governance power by the already wealthy.
We may have a governance token down the line but it will be carefully thought through to be as fair and equitable as possible without any misaligned incentives.