The protocol, in full

Monetarium is a blockchain that, given the appropriate political decision, provides the technical capability to replace any state’s cashless fiat currency with Monetarium’s SKA crypto-coins at a 1:1 ratio, enabling those crypto-coins to function as the country’s national currency.

By transitioning to Monetarium’s crypto-coins, a country gains a stable, economically efficient monetary system — sound (non-inflationary, commodity) money — along with the ability to replace its fractional-reserve banking system with a full-reserve one.

The Monetarium blockchain can simultaneously support up to 255 independent national monetary systems.

A country’s leadership might be headed by a policymaker who understands the negative impact of fiat currency on the economy and seeks to address it. There are already precedents where governments have included plans to abolish central banks — the foundation of fiat currency — and replace national fiat money with a more sustainable alternative. With the Monetarium blockchain, policymakers can now achieve this in the most effective way, without losing political capital.

Existing fiat currencies can spiral into hyperinflation and economic chaos. In such cases the only viable solution is often a political decision to abandon the national fiat currency and replace it — for example, with another country’s currency, as has happened before. Monetarium offers a superior alternative: instead of adopting a foreign currency, a country can transition to its own non-inflationary crypto-coin while retaining monetary sovereignty.

The team behind Monetarium — acting as its ideologists, developers, and initial investors — is already working on political initiatives to implement the blockchain in several countries.

The Monetarium blockchain works simultaneously with two types of crypto-coin: Varta (VAR) and Skarb (SKA). Both are native assets of the Monetarium blockchain — both are Layer-1 coins of the network. This is a key feature that distinguishes Monetarium from other blockchain networks.

VAR coins

VAR coins are minted when a new block is added to the blockchain. A block is created through mining (Proof-of-Work) and added after being verified and approved by the network’s nodes (Proof-of-Stake).

Since the launch of the Monetarium blockchain, 64 VAR coins are emitted with each new block (every 5 minutes). Every four years — every 420,480 blocks — the VAR emission halves. After the 32nd halving the emission per block reaches its smallest fraction (0.00000001 VAR) and then ceases. By that point the total supply of VAR coins will be up to 53,690,336 VAR and will remain constant thereafter.

VAR coins function as shares of the Monetarium network: node operators receive rewards for maintaining nodes and participating in block validation (under PoS) in proportion to their share of VAR coins. Their market price depends directly on the value and trading volume of SKA coins, since VAR coins essentially represent equity shares whose profitability is tied to the circulation of SKA coins.

SKA coins

SKA coins are issued through pre-mining in a quantity sufficient to replace the monetary supply of a national fiat currency. Once the exchange of fiat for SKA is complete, any excess SKA coins are burned. From that point the previously inflationary fiat currency ceases to exist, and the role of money in the economy is fulfilled by non-inflationary SKA coins.

As the national economy grows, a SKA[n] coin’s purchasing power increases — because its supply is fixed.

For each country that transitions, a dedicated set of SKA coins is issued: SKA1, SKA2, SKA3, and so on. During the transition a SKA[n] coin may be renamed to something more familiar — for example, SKA1 to UAH (Ukrainian hryvnia), SKA2 to ARS (Argentine peso), SKA3 to EUR (euro).

The price of a SKA[n] coin is initially equal to the purchasing power of the fiat currency it replaces. SKA[n] coins may be used not only by a country’s residents but also internationally, just as other cryptocurrencies are used today. Crucially, introducing SKA coins creates no additional monetary inflation in the global economy, because they replace existing national currencies rather than introducing new money.

A total of 900 trillion SKA1 coins have already been issued and are ready to replace the fiat currency of any country. Other SKA coins will be issued by consensus decision of Monetarium shareholders — the holders of VAR coins — as each country becomes ready to transition to sound money.

The Monetarium blockchain was built on Decred’s technology as its foundational framework. To fully achieve the objectives set for the network, however, Decred’s technology underwent significant modifications. As a result, the Monetarium network now differs fundamentally — both technologically and functionally — not only from all other blockchain networks but also from the original Decred network.

The base layer (Layer-1) of the Monetarium blockchain guarantees the reliability, security, and continuous operation of national monetary systems. High transaction throughput is achieved through Monetarium’s second-layer solution — the Lightning Network. The system also remains open to integrating other Layer-2 scaling technologies.