Pegged: A Proof-of-Luck Protocol for Denominated Stable Money

A Structural Response to the Capture of Currency Issuance by Replacing Merit and Control with Access and Chance

Abstract

We introduce Pegged, a distributed “proof-of-luck” protocol for issuing stable-denominated digital currencies through cryptographically verifiable lotteries.

Pegged does not rely on collateral, monetary policy, or governance. Instead, it distributes tokens such as $PEG or €PEG via smart contract–enforced draws, where winners are selected by secure randomness and outcomes are final.

This architecture replaces managerial control with structural neutrality. It makes no attempt to define merit, optimize allocation, or adjust to behavior. Users enter draws voluntarily. Each draw is self-contained. There is no treasury, no upgrade path, and no central authority.

The protocol’s economic foundation is the Pay Out Ratio (POR)—the percentage of total inlay returned to winners after protocol friction. POR reflects how much participants are willing to pay for redistributive opportunity. It serves as both price signal and valuation anchor. Over time, it allows tokens like €PEG to converge toward credible, behavior-driven stability.

Unlike most monetary systems Pegged does not pursue dominance or exclusivity. It blends into existing and evolving monetary environments, adding systemic stability opportunites.

Pegged does not simulate fairness. It enforces it through indifferent neutrality. It offers no incentive other than access, and no narrative beyond the draw. It is not a theory of justice. It is a working mechanism for redistribution—irreversible, minimal, and open.

Content

1. Introduction
2. Design Goals of Pegged
3. Protocol Fundamentals
4. Functional Architecture
5. Peg Maintenance and Value Logic
6. Risks and Mitigations
7. #PEG’s Comparative Positioning as an denominated Stablecoin
8. Post-Launch Operations and Non-Protocol Stakeholders
9. Pegged and the Economics of Chance
10. Use Cases and Distribution Dynamics
11. Limitations and Open Questions
12. Conclusion