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I think it's somewhat similar to innovator's dilemma, a lot of current tech leaders were once the underdog and now are at the top, so they end up becoming compl

I think it's somewhat similar to innovator's dilemma, a lot of current tech leaders were once the underdog and now are at the top, so they end up becoming complacent and non-innovators or slow innovators like the companies they replaced. An example of really cool smart contract usage is borrowing against your crypto, for example, this person/group was able to borrow roughly 340M$ [1], the best part, they didn't even had to provide their name or deal with any other human, all enabled by a smart contract that they can inspect and verify. 1: https://defiexplore.com/cdp/8463 https://defiexplore.com/cdp/8463

puranjay 6y ago
I find it incredible that someone can code up a strategy for deploying an investment vault, the community, which operates as a Decentralized Autonomous Organization (DAO), can decide to vote on it, and two days later, people can start investing money into it and earning interest - no middleman or manager involved. The investment vault will deploy the capital in different protocols based on the strategy outlined (and voted on by the DAO) automatically. The automation smart contracts can bring about is scary.
samvher 6y ago
To be honest this trend of borrowing against your crypto is specifically something that makes me very suspicious about the current state of the cryptocurrency world. If crypto crashes 30-50% again all these loans for which collateral is going to be sold would crash the whole market (or am I missing something?). Also it seems way too popular to borrow against crypto and then use that money to invest in crypto as well, creating significant leverage in the market, worsening the problem I mentioned before and inflating the price of crypto compared to its “true” value.
- rawtxapp 6y ago
  These are all over-collaterized, so you're usually borrowing up to 30% of your collaterals value, it's nowhere near the 2-20x leverage that you might get in traditional markets or leverage based exchanges. I think it makes a lot of sense in the current bull market, it probably makes less sense in a bear market unless you're borrowing only up to like 5-10% of your collateral to actually spend on something you need.
  - samvher 6y ago
    The numbers I’ve seen range more from 40-60% (haven’t gotten involved with this though so not sure how accurate these are). That would cause lots of issues on a 40% pullback.

puranjay 6y ago

I find it incredible that someone can code up a strategy for deploying an investment vault, the community, which operates as a Decentralized Autonomous Organization (DAO), can decide to vote on it, and two days later, people can start investing money into it and earning interest - no middleman or manager involved. The investment vault will deploy the capital in different protocols based on the strategy outlined (and voted on by the DAO) automatically. The automation smart contracts can bring about is scary.

samvher 6y ago

To be honest this trend of borrowing against your crypto is specifically something that makes me very suspicious about the current state of the cryptocurrency world. If crypto crashes 30-50% again all these loans for which collateral is going to be sold would crash the whole market (or am I missing something?). Also it seems way too popular to borrow against crypto and then use that money to invest in crypto as well, creating significant leverage in the market, worsening the problem I mentioned before and inflating the price of crypto compared to its “true” value.

rawtxapp 6y ago
These are all over-collaterized, so you're usually borrowing up to 30% of your collaterals value, it's nowhere near the 2-20x leverage that you might get in traditional markets or leverage based exchanges. I think it makes a lot of sense in the current bull market, it probably makes less sense in a bear market unless you're borrowing only up to like 5-10% of your collateral to actually spend on something you need.
- samvher 6y ago
  The numbers I’ve seen range more from 40-60% (haven’t gotten involved with this though so not sure how accurate these are). That would cause lots of issues on a 40% pullback.