• Price coherence as a competitive advantage
• What UFD is, technically
• The denominator
• Pricing versus settlement
• Making price meaning visible to customers
• Participation without persuasion
• Top-up as a bridge, not as storage
• Reduced trust surface
• Merchant mini-apps as a price visibility layer
• One federation as a bridge, many merchants as references
• Practical federation patterns
• The merchant federation as an operational “bank”
• Summary

§Price coherence as a competitive advantage

In inflationary environments, most merchants are forced into frequent price adjustments even when underlying costs have not meaningfully changed. Prices become difficult to compare over time, customers lose reference, and merchants absorb frustration generated by monetary instability rather than by real changes in value.

A merchant or merchant network that manages to keep prices coherent while others cannot creates additional value and gains a natural competitive advantage. Not by being cheaper. But by being more predictable.

When prices remain legible over time, customers perceive stability, competence and fairness. This contrast works on its own. It does not require discounts, incentives or explanations. It simply feels different.

Maintaining price coherence is therefore not a philosophical position. It is a practical differentiator in a world where price meaning is increasingly lost.

UFD exists to make this possible.

§What UFD is, technically

§UFD: A Fixed Denominator Unit of Account for Price Measurement

UFD defines a universal, non-expandable unit of account used exclusively to measure prices, independently of how payments are settled.

• It is not a payment rail.

• It is not a custody system.

• It does not compete with existing settlement methods.

UFD addresses a single problem: restoring a fixed denominator at the price-measurement layer.

In physical measurement, units remain meaningful because their denominators do not change. In modern economies, prices are expressed using expandable units, which makes long-term comparison, planning and trust increasingly difficult.

UFD corrects this problem strictly at the measurement layer.

§The denominator

The denominator used by UFD is the total supply introduced by Satoshi Nakamoto: 21,000,000 bitcoin, each divisible into 100,000,000 satoshis.

UFD expresses this denominator directly at the satoshi level.

One UFD is defined to pair one-to-one with one satoshi.

This pairing is intentional. Each UFD represents a fixed and indivisible share of the total supply, rather than a variable quantity of an expandable unit.

Because the total number of satoshis is fixed by construction, the UFD denominator is fixed by construction.

When a price is expressed in UFD, it represents a constant share of a fixed total, rather than a moving target.

Importantly, UFD does not require labeling prices as Bitcoin. The satoshi scale is used purely as a numerical anchor, not as a payment instrument.

§Pricing versus settlement

Once pricing is treated as a unit-of-account problem, settlement becomes an implementation detail.

A merchant may define prices in UFD while remaining fully flexible regarding how customers choose to pay.

At checkout, the UFD price is translated into a settlement amount appropriate for that moment.

Settlement may occur through:

• Bitcoin, via Lightning or e-cash

• Local or regional payment rails

• Any other operationally convenient mechanism

The critical point is that pricing logic remains coherent over time, even as settlement methods vary.

Operationally, this separation looks like this:

The merchant defines shelf prices in UFD.

At the point of sale, the UFD price is converted into a settlement amount.

The customer pays using an available method.

Accounting, planning and price reasoning remain UFD-based.

UFD is the price reference. Settlement is the execution layer.

§Making price meaning visible to customers

For customers, the primary friction is increasing prices.

When prices change frequently and without a clear reason, customers experience uncertainty even when merchants are acting reasonably.

By maintaining prices in a unit of account with a fixed denominator, merchants can make something visible that is usually hidden:

Prices do not change unless something real changes.

This does not imply fixed prices or protection from inflation. It implies coherence. When customers notice that prices remain legible over time, they naturally infer that purchasing difficulty reflects changes in the money they hold, not opportunistic repricing by the merchant.

This reframes the relationship without confrontation or explanation.

Customers who remain in fiat will still experience declining purchasing power, but they will understand what is happening. The system does not stop monetary dilution. It makes its effects visible instead of confusing them with rising prices.

§Participation without persuasion

This model does not require merchants to convince customers to adopt a new system.

Customers are not asked to switch currencies, understand Bitcoin or believe in any narrative.

They are simply invited into an environment where:

• Prices remain coherent

• Checkout is simpler

• Payment options remain flexible

Participation emerges through repeated use, not persuasion.

§Top-up as a bridge, not as storage

In merchant federations built on Fedimint and apps such as Fedi, stable pricing naturally gives rise to a second behavior: pre-emptive top-up.

Top-up is not intended as saving, investment or long-term storage.

It functions as a pre-payment stage, a short bridge between holding value and spending it.

The size and duration of this bridge are entirely individual. Some customers may hold balances for hours or days. Others may keep slightly larger amounts for convenience. No minimum, no expectation and no lock-in are required.

This framing mirrors familiar systems such as transit cards or prepaid services, but with the added benefit of coherent pricing.

§Reduced trust surface

Because balances are small and transient, the trust required from customers drops dramatically.

Customers do not need to trust the federation as a long-term custodian. They only need to trust that it works reliably at checkout.

This reduces:

• Perceived custody risk

• Psychological resistance

• Onboarding friction

Trust is not eliminated, but the amount required is minimized by design.

Over time, confidence may grow naturally through use. Critically, the system does not depend on that growth to function.

§Merchant mini-apps as a price visibility layer

Price coherence becomes significantly more powerful when prices are visible before checkout.

Merchant mini-apps provide a natural interface for this.

A supermarket or retail network may operate a simple mini-app within the federation environment to display prices expressed in UFD.

This allows customers to:

• See prices in advance

• Compare them with past experience

• Recognize coherence over time

All without requiring explanation.

When prices are visible ahead of purchase, top-up becomes a natural preparatory step rather than a financial decision. Customers may allocate a small balance based on familiar spending patterns before arriving at the store.

For merchants, mini-apps function as a direct communication channel and a pricing reference surface, reinforcing stability as a competitive advantage rather than relying on discounts or promotions.

Importantly, these mini-apps are not marketplaces or e-commerce systems. They simply extend price visibility and coordination into the customer’s daily workflow.

§One federation as a bridge, many merchants as references

Customers do not need to join multiple federations to participate.

A single consumer may participate in a federation that functions as a **default payment bridge **for it, while multiple merchant mini-apps remain visible as informational layers within one same application.

Prices, catalogs and references can be explored across different merchants using one interface and one balance.

When payment occurs, settlement is routed through the customer’s chosen federation, regardless of which merchant is involved.

This allows users to maintain:

• One app

• One balance

• One habit

While merchants gain price visibility without requiring exclusive federation membership.

§Practical federation patterns

Two common patterns emerge in merchant environments.

§Single-merchant federation

A merchant such as a supermarket, fuel station or service provider operates its own federation for customers, staff and selected suppliers.

Prices are maintained internally in UFD.

Customers participate because the relationship is already recurring and local. Stable price references encourage small, anticipatory top-ups.

The federation acts as a coordination layer where balances circulate when operationally useful, while checkout remains flexible.

Accounting and margin reasoning remain UFD-referenced, simplifying planning.

§Shared merchant federation

A group of local merchants jointly operates a federation.

Examples include grocery stores, cafés, bakeries, fuel stations or merchant associations.

The group agrees on UFD as a common pricing reference.

For customers, the federation becomes a familiar daily spending environment with coherent prices across multiple merchants.

Value circulates locally before external settlement is required, while each merchant retains autonomy over operations and payment acceptance.

§The merchant federation as an operational “bank”

A merchant federation can be understood as an operational “bank” owned by the merchant or merchant network, purpose-built for payments, settlement and internal coordination.

It provides the merchant with a dedicated payment rail offering instant settlement, minimal fees and no chargebacks, without relying on traditional banking intermediaries.

In this model, the federation serves as the merchant’s preferred infrastructure for receiving and distributing value, while remaining entirely optional for participants.

Customers, employees and partners may choose how they interact with it.

They can:

• Use the federation directly

• Maintain only small, short-lived balances

• Treat it as a temporary bridge before payment

• Or bypass it entirely and pay from their own wallets

Participation is never mandatory.

The level of trust required is not contractual or absolute. It is expressed implicitly through amount and time. Smaller balances held for shorter periods require minimal trust, and the system is designed to function well at this lowest trust level.

This makes the federation fundamentally different from traditional banks. It does not demand long-term custody or exclusivity. It competes purely on operational efficiency.

In this sense, the merchant gains the benefits of having an internal bank, while users retain full autonomy over how much they rely on it, if at all.

§Summary

UFD introduces a unit of account anchored to a fixed denominator, expressed directly at the satoshi level, without functioning as a payment rail or custody system.

By separating pricing from settlement, merchants gain the ability to maintain coherent price meaning over time.

This coherence becomes a competitive advantage in inflationary environments, reducing friction and restoring trust.

Stable pricing naturally enables small, pre-emptive top-ups, framed as a bridge to payment rather than as storage.

Merchant mini-apps make price coherence visible ahead of checkout, while a single consumer federation can function as a universal bridge across multiple merchants.

UFD defines how value is measured. Federations define how people coordinate.

Together, they create local economic environments where prices regain meaning and trust requirements are reduced rather than amplified.

*For further discussion or collaboration around this framework, contact: *education@bitcoinawareness.work