PegNet

 Pegging to cryptocurrencies can facilitate transactions representing Bitcoin or other cryptocurrency values without the transaction limitations that might exist on the those blockchains. Pegging values to other commodities or assets are possible, expanding the use cases for a Pegged Token Network. This paper describes Pegged Token Networks in more detail, and goes into an implementation and design of such a network, based on the Factom Protocol.

Introduction

A pegged token is often referred to as a stable coin. To date, stable coins are single tokens that use a range of mechanisms to maintain their peg to the real world assets they represent. PegNet is a Pegged Token Network, and it leverages simple game theory and a set of pegged tokens that self reinforce each other in holding their mutual pegs. The network provides a mechanism for managing payments, treasury allocations, risk abatement, arbitrage, and budgets across jurisdictions without requiring expensive and slow processes through external parties such as financial institutions, payment processors, exchanges, etc.
A possible set of assets that would have corresponding pegged tokens might include:

The pegged token for an asset would be designated by adding a ‘p’ to the asset designator. So the pegged token tracking USD would be pUSD. Gold would have a pegged token of pGold. Having a range of pegged tokens would allow the user of PegNet to maintain their holdings in any of the assets supported, and to make transactions in any of the assets supported. Asset selection should be driven by market value, availability of market data, and value of the use cases for the pegged token.