ParssonDAO aims to be a DAO making monetary experiments with the aim of creating better money for the world. In order to be a better money, we need to solve money's functions. What are these functions that we need to meet? Money is well known for having two key functions, medium of exchange and store of value.

Probably the only real function for money is the first. If there was no need for money to act as an intermediary between buyers and sellers of different goods and services there wouldn’t be any need for money to begin with. As stores of value other kinds of property are just as good or better. Money is not properly a store of value because it has no intrinsic value of its own, it has no utility except in exchange. Money which is being used as a store of value is money which is out of action for the time being. Nevertheless the use of money as a store of value is traditional and can easily be tolerated. If it were not for the demand for money as a store of value, the money supply would be nothing more than the momentary balance on hand between a receipt of money income and a money expenditure.

If money is to hit its potential as a medium of exchange, it necessarily must be a good measuring stick for all things of value. Gold has traditionally been seen as a useful measuring stick penalising neither creditors or debtors.

ParssonDAO’s first currency experiment Elastix aims to meet these needs of money. First of all we aim to make a unit of account. Informed by Jens O Parsson’s economic theory in his work Dying of Money we aim to keep Elastix’s value constant according the following equation:

Price Level = Money Quantity X Money Velocity / Supply of all Real Values

Essentially this is a form of the quantity theory of money and based on the assumption that prices as an aggregate are mathematically determined by the total amount of money which is available for spending in a given period of time, in relation to the total supply of all values which are available for purchase with money in that period of time.

US economic data is going to be used to track changes in the price level and as time runs our index will either increase or decrease in exchange value against the US dollar. Our job is thus to keep the price level stable.

This will be no easy task and the data we will use to calculate this equation is not decided upon by any means. If you would like to help contribute to ParssonDAO it would be great to hear from you.

At the moment for money quantity, M2 Money Supply data will be used similarly fred database data for Money Velocity will be used and US GDP data will be used for calculating the supply of real values. This may well be likely subject to change.

I believe creating a cryptocurrency modelled off current economic data and aimed at achieving Unit of Account status is sufficiently different to existing cryptocurrencies and if done well could successfully endure the test of time.