Dragon Fiat Currency

Also called hoard economies, dragon fiat economy describes systems where the value of the currency is based on the amount of gold a dragon is hoarding and the strength of the dragon when anyone tries to take any gold away. 
== Overview ==
The system bases itself on the delicate equilibrium based on two extremes. Firstly, there is the fact that removing gold from a dragon's hoard will inevitably cause it to become enraged, hoards being critical to dragon reproduction. Secondly, there is the fact that a sufficiently large hoard will naturally spawn dragons. This phenomenon is because gold is the main cofactor used in draconic metalloproteins, and dragon eggs are made by gold being compressed under its own weight. 
== Creation process ==
The dragons have an innate treasure hoard sense and if someone hoards too much wealth in one spot then a dragon will show up. Creating a dragon hoard is a well understood mechanism which happens in several stages.
The first step is to discover the amount of hoarded material needed to spawn a dragon. Then creating a system that adds a coin onto a critical mass wealth pile to spawn a dragon. Once the dragon has spawned, and instantly gets killed by hunters, gold is removed from the hoarded wealth to remove dragon spawn point. The hoard can then be used as a bank vault. The equilibrium is that too many withdrawals will enrage the dragon, too many will create more dragons.
== Society ==
The cosmopolitan societies of welt often use gold as a universal currency, and have various adaptations to handle the inherent danger dragons pose.  Some societies employ hunters to deal with dragons spawning in hordes, others negotiate with the dragons directly and incorporate them into the financial system, others actively avoid the system and go to lengths to prevent the creation of weaponized hoards within their territories.
=== Hunters ===
Gold hoards spawn dragons, because of this, gold hoarding is a very dangerous activity, and as a result banking and revenue services are trained in dragon hunting.
Some hunters farm dragon materials by lying in wait near known gold hoards. A prominent example are the dragon lakes in Botwa, where hunters camp nearby the fountain hordes to await dragons that emerge at sunrise. Too much gold causes the frequency of dragons spawning to increase. Some countries use more and more hunters to quell this spawning, but this can lead to a full infestation of dragons should the hunters be unable to handle the amount of dragons being spawned.
=== Managed hoard economies ===
If the dragons are at least intelligent enough to talk to, then it's possible to convince them to allow gold to be withdrawn by explaining the banking system with bank loans and interest generated from deposited gold. These economies have a national currency with the image of the dragon on it since the dragon considers that gold its personal property, but it's a lot easier to hoard more wealth by creating a stable economy through a centralized financial system.
This creates a dragon fiat currency system, regular people being more likely to trust a dragon with handling their gold since the dragon would be more focused on the gold itself whereas regular people would be more concerned about what they can buy with the gold. A symbiotic relationship forms where a fiat currency is backed by the amount of gold the dragon is hoarding, which would encourage people to exchange gold for the currency in order to be able to participate in a stable economy. 
This also means that bank runs and economic downturns have the threat of unleashing a dragon in the city, making bank runs less likely. People are less likely to make hazardous bets and over-lend when there's the threat of a dragon to consider. 
=== Weaponized dragon hoards ===
People will go to lengths both to prevent and force dragons to spontaneously come into being. A group of terrorists worked at smuggling tiny bits of gold into a city and then breaking into the vault at the castle so they can add their gold to whatever was being stored so it would cause the total amount to go over the criticality percentage to spawn a dragon that destroys the city. Gold bombs are bombs that contain vast amounts of gold with a platinum core that once blasted into the centre, creates a dragon. 
Category:Economics
Category:Financial concepts
Category:Dragons