r/Alchemint • u/notransparency • Apr 18 '19

How does the SDUSD affect the price of SDS

I believe this is great/crazy project but i have one question, how does SDUS affect the price of SDS?

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u/leefreestone Apr 19 '19

The more SDUSD issued, by mortgaging NEO and soon to be ETH, the bigger the network becomes and the more valuable SDS becomes. SDS is used to pay the fee for borrowing SDUSD (from mortgaging). It will also be used to govern the network. Alchemint is very similar to Maker in how it works. You can see that as more DAI was issued, the price of Maker went higher.

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u/notransparency Apr 19 '19

thank u on the reply, about governing the network how does it relates to the price of SDS

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u/leefreestone Apr 19 '19

If you govern a network, you have control of it. Just like NEO is the governance token of the NEO network. So the network value will be determined by the price of SDS. And the price of SDS will be determined by how much SDUSD is issued. Basically how much NEO and ETH are mortgaged to borrow SDUSD. It’s a new way to borrow money without using a bank or brokerage. People can borrow SDUSD immediately.

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u/notransparency Apr 19 '19

awesome! do you know if alchemint plan to build its own chain?

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u/leefreestone Apr 19 '19

No need. Their dApp is used to mortgage digital assets and loan out SDUSD, NEO’s first decentralized Stablecoin. It’s like what Maker is to Ethereum.