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Autonomous software exchanging currencies without anybody being in control is cool. I find it hard to think otherwise. You have a contract written in software

by basch 5y ago

Autonomous software exchanging currencies without anybody being in control is cool. I find it hard to think otherwise. You have a contract written in software, people pledging money to liquidity pools, and the rest is just magic. Sure you can go to a bank or someone and pay a currency exchange fee, but the fact that its possible P2P is quite neat. It's basically Banks-as-software, collaboratively maintained like Wikipedia.

danpalmer 5y ago
But that still doesn't solve any of those problems I mentioned? Plus I can already do P2P currency exchange. I don't because it's inconvenient to find those to exchange with, so I happen to use a marketplace (TransferWise), and they take a cut because they're providing a useful service and now they're an exchange. Exactly the same will happen with DeFi currency exchange, so how is it better?
- sprafa 5y ago
  Not sure if you got what he said. It’s better because instead of transfer wise controlling the money from point A to point B and taking a percentage as a fee (0.1% or whatever) you have 10 000 people who build a liquidity pool where the money gets transferred from point A to B. All those 10 000 people share the 0.1% fee. Maybe less, in an extremely competitive space. Basically all the centralisation, the app takes a fee bullshit goes away, and instead you get 10 000 or 100k or 1mil people all sharing their money and receiving part of the fee. The dev can also write into the smart contract that he gets paid a percentage as well. Boom, you have a transferwise competitor with 100 mil in liquidity within days with 0 server costs. You can do this right now with a few days/weeks work on a decentralised application. You don’t think that’s big? Any app that “takes a cut” in exchange for having written a few thousand lines of code and maintaining server infrastructure will be challenged by decentralised alternatives.
  - danpalmer 5y ago
    I think I understood it. > you have 10 000 people who build a liquidity pool > The dev can also write into the smart contract that he gets paid a percentage as well. This is literally what TransferWise is. They convinced thousands of people to work together to build a liquidity pool – that's the hard part – and then they take a small cut.
    - sprafa 5y ago
      Sure but - the hard part - transferwise had to build a pool of people - can be done in days in crypto now.

by basch 5y ago

danpalmer 5y ago

But that still doesn't solve any of those problems I mentioned? Plus I can already do P2P currency exchange. I don't because it's inconvenient to find those to exchange with, so I happen to use a marketplace (TransferWise), and they take a cut because they're providing a useful service and now they're an exchange. Exactly the same will happen with DeFi currency exchange, so how is it better?

sprafa 5y ago
Not sure if you got what he said. It’s better because instead of transfer wise controlling the money from point A to point B and taking a percentage as a fee (0.1% or whatever) you have 10 000 people who build a liquidity pool where the money gets transferred from point A to B. All those 10 000 people share the 0.1% fee. Maybe less, in an extremely competitive space. Basically all the centralisation, the app takes a fee bullshit goes away, and instead you get 10 000 or 100k or 1mil people all sharing their money and receiving part of the fee. The dev can also write into the smart contract that he gets paid a percentage as well. Boom, you have a transferwise competitor with 100 mil in liquidity within days with 0 server costs. You can do this right now with a few days/weeks work on a decentralised application. You don’t think that’s big? Any app that “takes a cut” in exchange for having written a few thousand lines of code and maintaining server infrastructure will be challenged by decentralised alternatives.
- danpalmer 5y ago
  I think I understood it. > you have 10 000 people who build a liquidity pool > The dev can also write into the smart contract that he gets paid a percentage as well. This is literally what TransferWise is. They convinced thousands of people to work together to build a liquidity pool – that's the hard part – and then they take a small cut.
  - sprafa 5y ago
    Sure but - the hard part - transferwise had to build a pool of people - can be done in days in crypto now.