Society · Economics
ExchangeRate
Conversion ratio between value systems
Definition
Mechanism
A definable ratio between two distinct Value types or Metrics at a specific point in time. It allows agents with orthogonal utility functions to transact.
Invariants
- Names the source and target Value types and the ratio between them.
- Carries the timestamp or window over which the rate is valid.
- Invertible where there is no spread: Rate(A→B) equals 1 / Rate(B→A).
Risks
Failure modes
Stale rate
the window has expired and the ratio is applied anyway.
Assumed invertibility
a spread is present and the inverse rate is computed rather than quoted.
Relationships
Builds on
Used by
Yields
Translating internal utility to shared numeraire
Reference
Data schema
{
"type": "object",
"description": "A rate between two value types, valid over a stated window.",
"properties": {
"source_type": {
"type": "string",
"description": "Value type being converted from."
},
"target_type": {
"type": "string",
"description": "Value type being converted to."
},
"ratio": {
"type": "number",
"description": "Units of target per unit of source."
},
"valid_from": {
"type": "string",
"description": "Start of the validity window."
},
"valid_until": {
"type": "string",
"description": "End of the validity window, if bounded."
}
},
"required": [
"source_type",
"target_type",
"ratio",
"valid_from"
]
}