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You can send a stablecoin if you have a problem with volatility. There's even a native one called Dai which is outside the traditional banking system.

by kobasa 7y ago

ppf 7y ago
And how is it pegged? Someone asked the various exchanges very nicely if they could only trade it for $1?
- robcohen 7y ago
  Dai is explained here: https://www.youtube.com/watch?v=GnoQOlVTMeg https://www.youtube.com/watch?v=GnoQOlVTMeg
  - ppf 7y ago
    The only way to find out is to watch a 20 minute video by a crypto nutter? Is there not a simple explanation for how Dai is pegged to the dollar?
    - zionic 7y ago
      DAI is a complex series of loans, borrowing, and interest that creates incentive to sell your DAI if it goes over $1 and incentive to buy if it goes below $1. DAI has basically maintained $1 for years even as ETH prices have been all over the place. It's battle tested. If you can't be bothered to do a few minutes of research on a complicated topic I don't know what you're doing here.
      - ppf 7y ago
        So you're basically telling me "it's complicated"? These "incentives" you mention require general faith on the part of traders that Dai really is worth $1, and given the incredibly low liquidity of USD/Dai trading, you can stay in fantasy land for a long time. >If you can't be bothered to do a few minutes of research.. I'm not on HN to "learn" crypto, and you forget you're not on some crappy crypto forum.
        robocat 7y ago
        You appear to be very rude to me; you asked: > And how is [DAI] pegged? Someone asked the various exchanges very nicely if they could only trade it for $1? This is a forum and people have given you pointers to answers and you are expected to do the work to study on your own. This happens a lot in life.
        ppf 7y ago
        So far, I have a 20-minute video that is clearly mostly not about the Dai peg, and a link to a very wordy "paper". I skimmed both, and the answer is apparently "oracles", or a price feed from several crypto exchanges. That's a really simple answer, that doesn't need burying in layers of cryptobabble and an attitude that I can only describe as condescending.
        robocat 7y ago
        It is very good to be critical about the value of information others provide. But I find your commenting style abrasive; I wouldn't be surprised to see you flagged if you continue with it (especially with multiple examples in a single thread). Occasional outbursts seem to be tolerated here, although frowned upon as unconstructive. I myself personally tend towards abrasive confrontation of facts; but I really value the rules here since they create good discourse and avoid discord.
    - Legogris 7y ago
      If you have an adversarial mindset (which is absolutely healthy) and want to understand it well enough to not immediately come up with counterarguments whose only valid reply is "RTFM", yes, it takes at least 20 minutes. But regardless, I'll bite. DAI has a couple of intended use-cases. I will focus here on the "stable coin" asset, meaning you should be able to expect it's value to not go up or down over time. It is inherently debt. The main component of DAI is "CDPs", Collateralized Debt Positions. There is a smart contract on the ETH blockchain. Smart contracts are computer code on the blockchain that are "open trustless execution", meaning you can inspect the source code, verify that it matches the deployed bytecode, and be certain that any transaction follows the rules. In DAI, there is no entity that can even theoretically exit-scam you. The configuration parameters of this smart contract is set by votes by the holders of the MKR token. This token is traded on public markets and is the speculative token of the ecosystem. You can deposit assets into this smart contract. The current version of DAI only takes ETH, but the intention is that MKR holders will consider any significant asset representable on the ETH blockchain. This includes other stablecoins (think fiat-backed tokens), tokenized equity or government bonds (which have already been issued on the ETH blockchain), tokens backed by commodities like gold, etc. When you deposit assets into the smart contract, you get DAI in return, representing a loan backed by the deposited assets. How much DAI you get in return is determined by an oracle (meaning a smart contract providing data external to the blockchain). This oracle is aggregated from several other oracles, similarly public and approved by the MKR governance. In general, the system is over-collateralized at any point in time. There is an incentive and liquidation system around the whole things that goes a bit further to ensure that the price remains stable despite fluctuations - and so far the DAI/USD price has remained really close to 1 throughout the ETH/USD long bleed of 2018, including short periods of high volatility. There is some degree of risk involved of course, most notably including the oracle price feeds. There is a road map to both increase transparency and decrease the possibility of collusion between oracle providers. There is also the "emergency shutdown", which involves freezing and instant liquidation, but this comes at a big cost to the MKR holders who have to approve it. Despite having been running for several years and having dozens of people (I think over 100 now?) it is, of course, still to a large part an experiment that is still evolving. But so far it has been performing better than I thought. And there is no way you could call it a scam.
- Geee 7y ago
  It's backed by collateral locked in Ethereum smart contracts. https://makerdao.com/en/whitepaper#overview-of-the-dai-stablecoin-system https://makerdao.com/en/whitepaper#overview-of-the-dai-stabl...
  - ppf 7y ago
    That doesn't explain how it's pegged to the dollar.
    - Legogris 7y ago
      It is laid out pretty well in the link you got how it is not pegged to the US dollar (which I don't think anyone claimed either).
      - ppf 7y ago
        >You can send a stablecoin if you have a problem with volatility Yes, they did. I'm aware that Dai is not well pegged to the dollar, but then I'm not a crypto-fan.
        Legogris 7y ago
        "Stablecoin" != "hard peg to USD"
        ppf 7y ago
        I'm fully aware of that. What I would like to know is the mechanism that links Dai in any way to USD. So far, I've been told the onus on me is to research it, and then that my conclusions from that research are wrong.
        Legogris 7y ago
        If you spent as much time reading and internalizing the whitepaper as you did arguing about it online you'd be there already. I know I'm being snarky, but you're coming of as trollier and trollier. This is not Reddit.

You can send a stablecoin if you have a problem with volatility. There's even a native one called Dai which is outside the traditional banking system.

by kobasa 7y ago

You can send a stablecoin if you have a problem with volatility. There's even a native one called Dai which is outside the traditional banking system.

ppf 7y ago

And how is it pegged? Someone asked the various exchanges very nicely if they could only trade it for $1?

robcohen 7y ago
Dai is explained here: https://www.youtube.com/watch?v=GnoQOlVTMeg https://www.youtube.com/watch?v=GnoQOlVTMeg
- ppf 7y ago
  The only way to find out is to watch a 20 minute video by a crypto nutter? Is there not a simple explanation for how Dai is pegged to the dollar?
  - zionic 7y ago
    DAI is a complex series of loans, borrowing, and interest that creates incentive to sell your DAI if it goes over $1 and incentive to buy if it goes below $1. DAI has basically maintained $1 for years even as ETH prices have been all over the place. It's battle tested. If you can't be bothered to do a few minutes of research on a complicated topic I don't know what you're doing here.
    - ppf 7y ago
      So you're basically telling me "it's complicated"? These "incentives" you mention require general faith on the part of traders that Dai really is worth $1, and given the incredibly low liquidity of USD/Dai trading, you can stay in fantasy land for a long time. >If you can't be bothered to do a few minutes of research.. I'm not on HN to "learn" crypto, and you forget you're not on some crappy crypto forum.
      - robocat 7y ago
        You appear to be very rude to me; you asked: > And how is [DAI] pegged? Someone asked the various exchanges very nicely if they could only trade it for $1? This is a forum and people have given you pointers to answers and you are expected to do the work to study on your own. This happens a lot in life.
        ppf 7y ago
        So far, I have a 20-minute video that is clearly mostly not about the Dai peg, and a link to a very wordy "paper". I skimmed both, and the answer is apparently "oracles", or a price feed from several crypto exchanges. That's a really simple answer, that doesn't need burying in layers of cryptobabble and an attitude that I can only describe as condescending.
        robocat 7y ago
        It is very good to be critical about the value of information others provide. But I find your commenting style abrasive; I wouldn't be surprised to see you flagged if you continue with it (especially with multiple examples in a single thread). Occasional outbursts seem to be tolerated here, although frowned upon as unconstructive. I myself personally tend towards abrasive confrontation of facts; but I really value the rules here since they create good discourse and avoid discord.
  - Legogris 7y ago
    If you have an adversarial mindset (which is absolutely healthy) and want to understand it well enough to not immediately come up with counterarguments whose only valid reply is "RTFM", yes, it takes at least 20 minutes. But regardless, I'll bite. DAI has a couple of intended use-cases. I will focus here on the "stable coin" asset, meaning you should be able to expect it's value to not go up or down over time. It is inherently debt. The main component of DAI is "CDPs", Collateralized Debt Positions. There is a smart contract on the ETH blockchain. Smart contracts are computer code on the blockchain that are "open trustless execution", meaning you can inspect the source code, verify that it matches the deployed bytecode, and be certain that any transaction follows the rules. In DAI, there is no entity that can even theoretically exit-scam you. The configuration parameters of this smart contract is set by votes by the holders of the MKR token. This token is traded on public markets and is the speculative token of the ecosystem. You can deposit assets into this smart contract. The current version of DAI only takes ETH, but the intention is that MKR holders will consider any significant asset representable on the ETH blockchain. This includes other stablecoins (think fiat-backed tokens), tokenized equity or government bonds (which have already been issued on the ETH blockchain), tokens backed by commodities like gold, etc. When you deposit assets into the smart contract, you get DAI in return, representing a loan backed by the deposited assets. How much DAI you get in return is determined by an oracle (meaning a smart contract providing data external to the blockchain). This oracle is aggregated from several other oracles, similarly public and approved by the MKR governance. In general, the system is over-collateralized at any point in time. There is an incentive and liquidation system around the whole things that goes a bit further to ensure that the price remains stable despite fluctuations - and so far the DAI/USD price has remained really close to 1 throughout the ETH/USD long bleed of 2018, including short periods of high volatility. There is some degree of risk involved of course, most notably including the oracle price feeds. There is a road map to both increase transparency and decrease the possibility of collusion between oracle providers. There is also the "emergency shutdown", which involves freezing and instant liquidation, but this comes at a big cost to the MKR holders who have to approve it. Despite having been running for several years and having dozens of people (I think over 100 now?) it is, of course, still to a large part an experiment that is still evolving. But so far it has been performing better than I thought. And there is no way you could call it a scam.
Geee 7y ago
It's backed by collateral locked in Ethereum smart contracts. https://makerdao.com/en/whitepaper#overview-of-the-dai-stablecoin-system https://makerdao.com/en/whitepaper#overview-of-the-dai-stabl...
- ppf 7y ago
  That doesn't explain how it's pegged to the dollar.
  - Legogris 7y ago
    It is laid out pretty well in the link you got how it is not pegged to the US dollar (which I don't think anyone claimed either).
    - ppf 7y ago
      >You can send a stablecoin if you have a problem with volatility Yes, they did. I'm aware that Dai is not well pegged to the dollar, but then I'm not a crypto-fan.
      - Legogris 7y ago
        "Stablecoin" != "hard peg to USD"
        ppf 7y ago
        I'm fully aware of that. What I would like to know is the mechanism that links Dai in any way to USD. So far, I've been told the onus on me is to research it, and then that my conclusions from that research are wrong.
        Legogris 7y ago
        If you spent as much time reading and internalizing the whitepaper as you did arguing about it online you'd be there already. I know I'm being snarky, but you're coming of as trollier and trollier. This is not Reddit.