Re:Two thought experiments to evaluate automated stablecoins
by mikeyouse on Friday May 27, 2022 @01:32PM
(#31532320)
I think you're mistaken -- seigniorage is the difference between the cost and the value, it doesn't need to be a profit. Negative seigniorage is still seigniorage and many such papers treat it as such, e.g.;
Re:Two thought experiments to evaluate automated stablecoins
by throwawaycities on Friday May 27, 2022 @08:50PM
(#31536581)
>Negative seigniorage is still seigniorage and many such papers treat it as such
Notice how you qualify your statement as many such papers treat it as such.
Yes, you can find some people, articles that refer to a loss as seniorage, but that’s a misuse and inconsistent with the actual definition. That’s also why when they do use the term improperly they typically add “negative”, specifically because the definition of Seniorage refers specifically to revenue/profit from printing money.
Technically there is no seniorage when there is a loss, historically it was called an inflationary tax, meaning a loss in value to the existing money supply you hold.