Origins

The concept behind Cogito tracercoins is to define cryptocurrencies whose value is tied to the steady progress of humanity along some measurable axes. The further and faster progress occurs, the more each token is worth. Within this framework, Cogito will initially create three tracercoins that are soft pegged within specific trading boundaries (an upper bound and a lower bound) of three separate synthetic indices.

Tracercoin innovation

Cogito’s tracercoins are not “stablecoins'' in the traditional sense of being crypto-assets that purport to maintain a stable value by referring to the value of one fiat currency or a basket of fiat currencies that are legal tender, nor to individual commodities nor baskets thereof. They are “stablecoins'' in a broader sense, in that they aim to maintain a measure of value stability by automatically regulating their value over time to track specified synthetic indices. If a synthetic index has low variance and is very slow to increase in value over time (like the index underlying the GCOIN), then a tracercoin can track the index closely and maintain stability that way. If a synthetic index increases in value over time in a steady but rapid way (like the index underlying the XCOIN), then tracking its value with a tracercoin is still possible, but one must accept a somewhat greater degree of deviation from the index. This is due to the fundamental principles of risk/return tradeoff.

Tracercoins will initially be fully backed by appropriate reserves, coordinated by an algorithmic protocol that manages liquidity and collateral contributed by liquidity providers. However, as the Cogito Protocol evolves, it will move towards a fractional-ratio phase, in which the backing reserves need not grow commensurately with the number of tokens released.

These tracercoins are designed to be resistant to hyperinflation due to their low-to-medium volatility and offer economic freedom and a stable growth opportunity to anyone, anywhere. Together with the three tracercoins, we will launch a native CGV token that, besides being a governance token, is the main beneficiary of the protocol's revenues.

The Future of Finance

Over time, Cogito aims to develop different financial products building on its core tracercoins, targeting other users with varying scopes of business. It will start with DeFi users, but it will expand operations into FinTech to let anyone use Cogito for day-to-day payments. Cogito tokens are well-suited for everyday use as stores of value and payments (though rollout for extremely low-cost, high-volume micropayments will likely require some level of custom blockchain infrastructure such as that provided by the Hypercycle sidechain framework). It is also possible for Cogito to issue additional tracercoins based on other synthetic indices, depending on market demand.