A Currency to Last Forever — VERA

6 min readFeb 8, 2022

Introducing VERA Currency

tldr; VERA is a currency tracking the total global market cap, for all asset classes, weighted in proportion to their relative market values. It’s the optimal combination of risky assets and the ideal store of wealth. In essence, VERA will be the first and only currency with a perpetual value attribute. All in one token, real-time price exposure to the entire market in a single solution. The entire market. Historically, this measure was used as a portfolio index (commonly known as GMP), we believe it’s the ideal measure for a currency and store-of-value.

Why create a disposable currency when we can have it last forever? Full diversification permits a currency to have an objective value. Currency cycles become irrelevant and economic calculation gains new meaning with perpetuity of value. All in all, VERA is a perpetual store-of-value. Safe to say that tracking the whole market according to asset’s marginal weights will ensure that VERA will last forever.

Currencies should not be designed based on a single asset, subjective values (fiat), or backed by a small, biased basket of assets. To make this a reality, VERA will launch as a synthetic currency, tracking hundreds of assets injected on-chain. Overcollateralization will be a requirement to provide the currency’s real-world value and the ability to mint it.

‘’The goal isn’t to live forever but to create something that will’’

Chuck Palahniuk

Our Inspiration

Historically, currencies have a lifespan of about 30 years. The US Dollar has been serving as a global reserve currency for over 90 years, 40 of which as a global reserve fiat. The main reason why currencies fail is due to the subjective value attributed to them and the absence of broad market acceptance. The main values VERA offers are an objective and timeless assessment of what money is worth. If the currency we own now tracks the overall global market according to the existing market caps, it will maintain its value even 100 years from now.

Our inspiration came from asking ourselves: Is it possible to have a currency that is timeless and universal? A store of value (SoV) that will be relevant 10, 50, or even 200 years from now? Something generations could rely on to transfer wealth without hyperinflationary, subjective values, and poor management destroying its value?

Yes, tracking the entire market.

The main force opposing VERA from thriving would be the total apocalyptic destruction of our planet, which would result in zero market cap value for our financial markets. I don’t know if anything would matter at that point.

A lot of people would initially point out gold as some sort of safe haven where you can just park your capital and historical evidence assures future performance. What guarantees gold will be relevant 100 years from now? Especially as a store of value. Even Bitcoin…?

Essentially, the point of failure is calculating the value of money based on subjective opinions about what the value of money is. To solve this problem, we decided not to speculate on what the best next thing is considered a unit-of-account but to account for them all. Regardless of Bitcoin, Gold, USD, or coconuts, you can trade with Robinson Crusoe on an island where only 2 people live, the value of money should not rely on one asset, one government, or one protocol.

Intro

The brilliance of DeFi is the freedom to build the best possible financial solution in every category at a fraction of the cost that would take otherwise built on TradFi system. Investors today must choose between unsatisfying alternatives when considering a decentralized stablecoin, asset-backed currency, or cryptocurrency. On one side, there are volatile cryptocurrencies that cannot hold value or price anything due to rapid and constant changes in their value. On the other hand, we find fiat and algorithmic stablecoins that are subject to hyperinflation, subjective value bias, and concentration of trust in a single entity. If the US dollar’s value is completely deteriorated due to inflation or loss of trust in the government a decentralized stablecoin tracking the US Dollar is subject to the same forces. To truly build DeFi’s vision of access to all and interoperable financial access, it’s essential to have a perpetual, decentralized, objective, timeless, stable, and scalable form of currency that presents real stability for our financial system.

Welcome to VERA Currency.

VERA is located at the tangency point. Currency = Optimum Allocation

Injecting Data on Solana

Achieving precision on the total market cap in the calculation is essential, the protocol will collect a distinct set of data that leads to the confirmation of market values. These include, but are not limited, to the number of shares in the market, circulating supply, broad Money Supply, price execution of trades, total reserve of commodities. The new, nominal currency basket value trades in parallel with the underlying data metric it tracks. The creation of VERA requires overcollateralization to mint it, 125% to begin with. The smart contract ensures transparency and security that VERA is fully backed.

An aggregate of: 1.’’units’’ for each asset and commodity with 2. live price feeds to verify changes in market capitalization weights

Total Global Market Capitalization Data must be grouped and weighted in proportion to their relative market values in a single source. Data external from the Solana blockchain must be brought to the Solana blockchain by several data sources and reliable oracle solutions.

How VERA is Calculated

Data aggregated by the largest providers in the world including Bloomberg, S&P, FactSet, and Thomson Reuters will be inserted on-chain. Using tools and applications like Chainlink and Pyth network, we initiate this protocol on the Solana Blockchain.

The price of the VERA will be affected by the weighted components in its basket. For simplicity, let’s say the entire financial system had only 4 assets — Bitcoin, Apple Stock, US Treasuries, and Gold — and they represent 50%, 30%, 15%, and 5% respectively of the entire global market cap. If we assume the starting price of VERA is $10, the components underlying the basket will affect it accordingly. In this simple example, if the total gold market went to zero and all other assets remained constant, Vera’s price would now be valued at $9.5.

There are other alternatives when formalizing the price of an asset that aggregates several price oracles and distinct metrics such as market capitalization. We could add the total market cap for the assets included in the aggregation and normalize them with a simple divisor.

Currency Price = Total Market Cap / Divisor x

In our DevNet app, we collected the market cap for 29 assets available on Pyth.Network. In addition to that, we collected the total number of shares and confirmed the total market cap with on-chain prices from Pyth.

Price = (Number of Shares *Price)/ Divisor

Below is a simplified example of the calculations:

Governance

VERA will launch with centralized control of the project (such as choosing the data sources, price methodology, liquidation system, collateral assets available, etc.) and over time, will evolve to broad community and stakeholder control. The following rights in the protocol are controlled by the admin:

● The power to add several collateral sources

● The collateralization percentage ratio

● The ability to choose a new admin

● The final decision on data sources

● The decision on price methodology and assets available in the basket

Conclusion

● VERA provides a timeless, objective, and stable concept for the value of money

● The protocol broadly injects data into the blockchain, beginning with Solana and working into meaningful partnerships to extend its use.

● The protocol intends to provide a global market portfolio benchmark, for retail and institutional investors, based on measurable global capital stock, which will include more than 100 existing indices within 11 asset classes.

● VERA incentivizes financial stability by expanding currency choices to investors with maximized diversification. Devalued currency hurts creditors, and an upward-revalued currency hurts debtors.

● Users can deposit collateral to a Vault and mint the token frictionlessly

● Users in the future will earn incentives by providing liquidity to exchange pools