Cryptology ePrint Archive: Report 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.

Category / Keywords: cryptographic protocols / cryptocurrencies, mechanism design, secure multiparty computation, zero-knowledge, model predictive control

Date: received 16 Sep 2019

Contact author: david at calctopia com

Available format(s): PDF | BibTeX Citation

Version: 20190918:123956 (All versions of this report)

Short URL: ia.cr/2019/1054


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