OK but this 20% volatility is priced in dollars. This isn't price, this is exchange rate between USD and XMR if you treat XMR as a currency. Which one is the unstable one? Well, we call the one that is less often used as unit of account unstable. But prices of goods in the unit of account, in this case dollars, is not stable. Do you understand what I'm trying to tell you? All currencies are free floating. There is no "stable" currency. Inflation is a rough aggregate measure of prices, it's not uniform. Price of food goes up, price of computers go down, you do some math based on the size of those industries and some wonky tricks and you get a number that you call inflation.

You can't get a currency without volatility. All you can do is have market depth to absorb price changes, like you said, USD is less volatile because it's more widely used. Volatility is a measure of risk, and in fiat, the risk is priced in because it's guaranteed to devalue, it's no longer risky to hold dollars, you already know you're going to lose capital. Also the risk that a central bank can devalue your currency without warning is understated and this creates market distortions. If the inevitable outcome of hyperinflation were taken into account there would be much more volatility. Most fiat currencies are more volatile than XMR.

Inflation is a type of volatility. Inflation is just volatility with guaranteed downtrend in value. I'll take volatility to inflation any day.