4 ms·
>Digital assets are digital. Humans are the arbitrageurs. Humans are emotional. DAI is trying to create stability on top of Ethereum volatility. It's kinda like
by Acrobatic_Road 7y ago
>Digital assets are digital. Humans are the arbitrageurs. Humans are emotional. DAI is trying to create stability on top of Ethereum volatility. It's kinda like building a stable house on a shaky foundation.
And yet it works. Dai has practical results; it has weathered massive volatility in the price of Ether over the past 2 years.
>If you need to lock up 1.5 USD for 1 USD, you may as well go get 1 USD. It's a dumb idea to use 1.5 USD to get 1 USD.
If it's such a stupid idea then nobody would do it. Yet, there is now 350 million dollars worth of collateral people have put up of their own volition just to generate some Dai for themselves in this fashion. stats: https://defipulse.com/maker https://defipulse.com/maker
>DAI has a lot of jargon and technology. These things make it look sophisticated and fool people.
Or you just don't understand how it works. Dai is a complicated solution to a complicated problem, but its not some trick.
- ac29 7y ago> Or you just don't understand how it works. Dai is a complicated solution to a complicated problem, but its not some trick. But the problem isn't complicated. If you need something worth 1USD, buy 1USD. It is by definition stable relative to 1USD. You don't need to understand complicated terminology or esoteric failure modes. DAI is effectively never worth exactly 1USD: https://coinmarketcap.com/currencies/multi-collateral-dai/ https://coinmarketcap.com/currencies/multi-collateral-dai/
- Latty 7y agoPeople buy 1USD of Paypal account value for 1USD all the time, do you say the same thing to them? I'm not saying I definitely think Dai is a good idea, but fundamentally the value isn't the only thing that matters. The ability to transfer that value is important and Dai offers something different to USD there.
- ForHackernews 7y agoYes, Paypal is also terrible[0] and you'd have to be pretty dumb to deliberately keep a large fraction of your savings "invested" in a paypal balance. [0] http://paypalsucks.com/ http://paypalsucks.com/
- fastball 7y agoWho is using DAI as an investment instrument?
- ForHackernews 7y agoElsewhere in this thread posters are talking about users losing their "life's savings", but you're right perhaps they weren't investing. Maybe they just wanted to park money someplace they viewed as safer than a traditional savings account or treasury bonds.
- fastball 7y agoI think the issue is that people are using DAI to leverage what is an "investment" (or gambling, depending on your perspective) in ETH. But this isn't a failing of DAI. DAI merely allows you to leverage an existing position in ETH into a higher risk / higher reward investment, the DeFi way. This is only one of DAI's use-cases. That's probably not a good idea given how risky ETH is on its own, but again, it is not a unique failing of DAI when people use it in very risky ways. For example, you could take out a personal loan to achieve the same level of financial irresponsibility (as many people did when they used their student loans or whatever to buy crypto).
- dboreham 7y agoPresumably this is because there's a trade that promises one side something (stable value coin vs USD) that has another side that offers something different (profits if everything works out, losses if it doesn't?). Kind of like Lloyds of London?
- SilasX 7y agoIt looks like it stays pretty close though, never more than a few percent away. Another tracker: https://www.coinbase.com/price/dai https://www.coinbase.com/price/dai