Question: Here is an economic system: I make up a crypto token called WinCoin. I can issue an unlimited amount of WinCoins, since I made them
Here is an economic system: I make up a crypto token called WinCoin. I can issue an unlimited amount of WinCoins, since I made them up. I sell them to people for money.
You can use WinCoins to make term deposits, with me: You can give me back your WinCoins and I will keep them for some specified time period (say, a year), and at the end of the period I will hand them back to you with interest.
The interest is paid in WinCoins. The interest rate is high, say, 30% per year.
This is the only thing you can do with the WinCoins. Theyre not useful for payments, they dont run smart contracts on a blockchain, all you can do is trade them on crypto exchanges and deposit them for a 30% yield paid in kind.
So you pay me $100 for 100 WinCoins, you deposit them with me for a year, and at the end of the year I give you back 130 WinCoins.
At the end of the year, how much would you expect your 130 WinCoins to be worth? Explain.
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