# The ISC Reserves
### Monetary Philosophy
We believe ISC will one day compete meaningfully with the US dollar as a store of value and a currency for everyday transactions. But to get there, it must maintain a stable value, and avoid risky allocations that could cause wild price fluctuations, putting the savings and well-being of ISC users at risk.
The community holds great power in determining the ISC Reserves’ allocation and ultimately its success. As such, it is crucial to clearly articulate the objectives of the ISC Reserve and explore how we will achieve them.
#### **i. Objectives of the ISC Reserve-System**
As ISC is first and foremost a stablecoin, we propose the following objectives, in order of importance, for the ISC reserve-system:
1. Prioritize Stability: Minimize fluctuations and potential losses to match, or exceed, the stability of top fiat currencies.
2. Be Community-friendly: Ensure the reserve is easy to understand, implement, maintain, and analyze. The allocation should be intuitive and straightforward.
3. Optimize Returns: Pursue the highest returns without sacrificing stability or community-friendliness.
Our Monetary Philosophy can also be understood by posing the question, *“What is the simplest way to allocate funds in the ISC reserve-system to maintain a high-level of stability while also generating a healthy return?”* Identifying the optimal answer to this question, as a community, will ensure that ISC is a reliable, trustworthy currency.
#### **ii. Passive Diversification: A Path to Achieving Our Objectives**
Financial markets are inherently unpredictable; shifts occur rapidly and without warning. This is why the ISC reserve-system allocation strategy should not depend on anticipating future economic conditions.
Therefore, the **ISC Reserves’ allocation should be diversified**. Proper diversification spreads risk across asset classes, industries, and geographical regions. In other words, diversification reduces the impact of any one investment on the ISC Reserve and helps to even out the ups and downs of the financial markets.
The **ISC Reserves’ allocation must also prioritize passive management**, rather than relying on active adjustments that can be costly and difficult to execute consistently. The emphasis should be on low-cost, index-based investing, which prioritizes low fees and broad diversification to achieve sustainable, long-term returns.
This is not to say that changes to the ISC Reserves’ allocation cannot be made. On the contrary, we expect the community to submit and vote on proposals aimed at improving the ISC Reserves’ stability.
#### **iii. Initial Target Percentage Allocation**
The initial ISC Reserve allocation is designed to give it the broadest possible exposure to the global financial markets, thereby tracking its performance. At the core of this proposal is the belief that it is a fool’s errand to try and outperform the market.
Asset
Allocation
Equity, Global
20%
Commodity, Gold
20%
Bonds, Global Bonds
20%
Bonds, Short-term Treasuries
20%
Cash
20%
The current allocation of the ISC Reserves are viewable on [https://dashboard.isc.money](https://dashboard.isc.money/).
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