This rule relies on a rearrangement of the Equation of Exchange to \(M=P\cdot T/V\) and assumes—as is done in most iterations of the Quantity Theory of Money—that to the extent there even exist any relation between \(M\) or \(P\) and \(T/V\), it can be ignored. While the above rule is likely valid, at least in a long term sense, it illustrates a focus on stability at the expense of good monetary policy. Looking only the price level, the seigniorage shares model neglects to account for times when an economy may need to be stimulated or impeded by altering the monetary supply based on factors other than the explicit price level.
Poly
In contrast with the seigniorage shares model, the Poly system alters its currency supply not based on the explicit price level but rather on the real value of its associated economy, \(T\), and the velocity of currency movement, \(V\). By ignoring explicit price levels directly, we both respect Goodhart's law and circumvent two major issues. Moreover, we hope establish the Poly not as a blockchain representation of another (fiat) currency but rather as a independent currency unto itself.
The first of these two issues is a weakness of the seigniorage share model back in its original elucidation. This is the problem of accurately and trustlessly8 measuring the price level. Given that both methods of trustless information gathering, Distributed Oracles and Schelling points, have still yet to be robustly tested and have known weaknesses,9 the avoidance of relying on a feed on the price level offers a distinct advantage. The second problem we seek to address is that price levels are often "sticky" and fail to adjust in the short term, in fiat systems, this results in situations in which Central Banks are forced to estimate future price levels to determine present policy.