In the interim of developing Oracles and the GMU, we currently have a fixed ARTH peg at $2.00. I’d like to suggest that we increase this peg to $2.20 as a manual adjustment to this years inflation rate and increase in BTC and Gold price.
The GMU is weighted 80% of the following;
USA - USD (29.93%)
Euro Area - EURO (23.23%)
China - YUAN (18.90%)
Japan - YEN (10.17%)
India - RUPEE (4.85%)
UK - POUND STERLING (4.78%)
Brazil - BRAZILIAN REAL (3.84%)
Canada - CANADIAN DOLLAR (3.18%)
Switzerland - SWISS FRANC (1.12%)
Utilizing the following % of the currency weight;
Gold Weighting: 15%
Bitcoin Weighting: 5%
Since June 2021, Arth has been soft pegged to $2.00. Given the above weightings, we need to calculate the adjusted peg by looking at each currencies inflation rate over this time period, and the price appreciation of Gold and BTC. Then converting this all back into USD price point.
Since June 2021;
GOLD: $1,773 (June 2021), $1,801 (Current - Nov 2021). This is a 1.57924% Increase in Value
BTC: $32,000 (June 2021), $65,000 (Current - Nov 2021). This is a 103.125% increase in Value
USD - 5.4% Inflation
EURO - 4.1% Inflation
YUAN - 0.7% Inflation
YEN - 0.2% Inflation
RUPEE - 4.25% Inflation
POUND - 3.1% Inflation
BRAZILLIAN REAL - 10.25% Inflation
CANADIAN DOLLARS - 4.4% Inflation
SWISS FRANC - 1.2% Inflation
(data from https://tradingeconomics.com/)
Overlaying these inflation rates with the weighting of each for ARTH GMU at $2.00, we get the following;
ARTH = $1.60 (80% of $2.00)
Formula Example for USD:
(1.6 x 0.2993) x 1.054 = $0.5047
USD - 29.93% ($0.4788) +5.4% inflation = $0.5047
EURO - 23.23% ($0.3716) +4.1% inflation = $0.3869
YUAN - 18.90% ($0.3024) +0.7% inflation = $0.3045
YEN - 10.17% ($0.1627) +0.2% inflation = $0.1630
RUPEE - 4.85% ($0.0776) +4.25% Inflation = $0.0808
POUND STERLING - 4.78% ($0.0764) +3.1% Inflation = $0.0788
BRAZILIAN REAL - 3.84% ($0.0614) +10.25% Inflation = $0.0677
CANADIAN DOLLARS - 3.18% ($0.0508) +4.4% Inflation = $0.0531
SWISS FRANC - 1.12% ($0.0179) +1.2% Inflation = $0.0181
Gold And Bitcoin calculate at % of $2.00 (15% of 2, and 5% of 2), As opposed to the above fiats that are % calculations of the 80% GMU portion.
Gold: 15% ($0.30) +1.57% Value increase since June = $0.3047
Bitcoin: 5% ($0.10) +103.12% Value increase since June = $0.2031
Lets add this up to give us an accurate peg price of both June and Now.
June Calculation;
Gold: 15% ($0.30)
Bitcoin: 5% ($0.10)
USD - 29.93% ($0.4788)
EURO - 23.23% ($0.3716)
YUAN - 18.90% ($0.3024)
YEN - 10.17% ($0.1627)
RUPEE - 4.85% ($0.0776)
POUND STERLING - 4.78% ($0.0764)
BRAZILIAN REAL - 3.84% ($0.0614)
CANADIAN DOLLARS - 3.18% ($0.0508)
SWISS FRANC - 1.12% ($0.0179)
Total: $1.9996
Current:
Gold: +1.57% Value increase since June = $0.3047
Bitcoin: +103.12% Value increase since June = $0.2031
USD +5.4% inflation = $0.5047
EURO +4.1% inflation = $0.3869
YUAN +0.7% inflation = $0.3045
YEN +0.2% inflation = $0.1630
RUPEE +4.25% Inflation = $0.0808
POUND STERLING +3.1% Inflation = $0.0788
BRAZILIAN REAL +10.25% Inflation = $0.0677
CANADIAN DOLLARS +4.4% Inflation = $0.0531
SWISS FRANC +1.2% Inflation = $0.0181
Total: $2.1654
Calculating for the 80/15/5 GMU weighting, and the Fiat weightings of the 80% portion, including their inflation rates, puts Arth at a current fair value of $2.1654