Paper 2019/1054

Truthful and Faithful Monetary Policy for a Stablecoin Conducted by a Decentralised, Encrypted Artificial Intelligence

David Cerezo Sánchez

Abstract

The Holy Grail of a decentralised stablecoin is achieved on rigorous mathematical frameworks, obtaining multiple advantageous proofs: stability, convergence, truthfulness, faithfulness, and malicious-security. These properties could only be attained by the novel and interdisciplinary combination of previously unrelated fields: model predictive control, deep learning, alternating direction method of multipliers (consensus-ADMM), mechanism design, secure multi-party computation, and zero-knowledge proofs. For the first time, this paper proves: - the feasibility of decentralising the central bank while securely preserving its independence in a decentralised computation setting - the benefits for price stability of combining mechanism design, provable security, and control theory, unlike the heuristics of previous stablecoins - the implementation of complex monetary policies on a stablecoin, equivalent to the ones used by central banks and beyond the current fixed rules of cryptocurrencies that hinder their price stability - methods to circumvent the impossibilities of Guaranteed Output Delivery (G.O.D.) and fairness: standing on truthfulness and faithfulness, we reach G.O.D. and fairness under the assumption of rational parties As a corollary, a decentralised artificial intelligence is able to conduct the monetary policy of a stablecoin, minimising human intervention.

Metadata
Available format(s)
PDF
Category
Cryptographic protocols
Publication info
Preprint. MINOR revision.
Keywords
cryptocurrenciesmechanism designsecure multiparty computationzero-knowledgemodel predictive control
Contact author(s)
david @ calctopia com
History
2019-09-18: received
Short URL
https://ia.cr/2019/1054
License
Creative Commons Attribution
CC BY

BibTeX

@misc{cryptoeprint:2019/1054,
      author = {David Cerezo Sánchez},
      title = {Truthful and Faithful Monetary Policy for a Stablecoin Conducted by a Decentralised, Encrypted Artificial Intelligence},
      howpublished = {Cryptology ePrint Archive, Paper 2019/1054},
      year = {2019},
      note = {\url{https://eprint.iacr.org/2019/1054}},
      url = {https://eprint.iacr.org/2019/1054}
}
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