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I'm definitely not a fan of the current state of DeFi and crypto in general (NFTs are stupid), but it's just ignorant to claim that there are no "real world" us

I'm definitely not a fan of the current state of DeFi and crypto in general (NFTs are stupid), but it's just ignorant to claim that there are no "real world" use cases. To believe that, you'd also have to believe that savings accounts are not a "real world" use case. In reality, the market for money is extremely important for everyday life. Being able to trade off money now for more money later, and being able to do it in a variety of ways, is an essential ingredient modern exponential GDP growth and high quality of life to materialize. IMO current DeFi products do this in a way that is already better than the traditional banking sector, and it gets better all the time. I suspect that in 20 years a majority of US people will use some kind of DeFi product instead of a savings account.

vletal 5y ago
You tried to contradict the claim that the is no impactful application of smart contacts yet you failed to give a single example.
- mgraczyk 5y ago
  I've been using Compound instead of a savings account for ~2 years. I don't want to suggest any specific other platforms, but if you search "defi savings account" you can see that there are many.
tyre 5y ago
Could you outline why they’re better than traditional banking right now? Gas fees can be hundreds of dollars to interact with a DAO (even simple contracts like Uniswap to get the right tokens is expensive.) There are not banks hacked where people lose all of their money. People lose passwords all the time. With banks, you can get access to your account back. With DAOs, if you lose your private key…RIP. Coin prices are absurdly volatile. This is awful for currencies. The cryptokids point out all the time that 5% inflation means USD is a bad currency. Bitcoin dropped 20% in 24 hours. Imagine you need your savings right now. First you’d have to pay hundreds of dollars to access those funds and then you’d have 20% less than you expected. That’s garbage. Those are things to start off with. Can you make a serious case that DAOs are better _right now_? And if so, which _specific_ projects are better?
- mgraczyk 5y ago
  Yeah sure > Gas fees can be hundreds of dollars to interact with a DAO It's not "hundreds of dollars" to withdraw tokens from a savings account. More like $50. That's still way too much, but I don't pull money out of my savings account often enough for it to matter. It will get better over time. > There are not banks hacked where people lose all of their money. Not in the US, but there are other countries that exist. None of the DeFi platforms I have ever used have been hacked, but I'm glad for the possibility! It gives me more options in terms of risk vs. reward. > People lose passwords all the time. Yep this one is bad, but there are ways to improve it (social key recovery etc) that people are working on. On the other hand, I've spent a ton of time on the phone with banks trying to get access to my own accounts every time I move. I've never had that problem with DeFi because they don't KYC. > Coin prices are absurdly volatile. Doesn't matter at all, I'm talking about stablecoins. I only really use fiat backed stablecoins, so there's almost no principle risk. Also from this point I think it's pretty clear you don't understand how people use DeFi. Nobody is holding strait unleveraged BTC in a DeFi platform. You would just hold BTC directly, in which case the cost to withdraw would be ~$3 right now. > Can you make a serious case that DAOs are better For me they are infinitely more convenient. I've spent at least 10 hours this year on the phone with banks and financial institutions. I've spent 0 minutes trying to get access to my defi accounts. I use a trezor for cold storage. The rates are better because I'm willing to tolerate more risk (and I think that smart contract and collateral risk for certain platforms is currently mispriced). > which _specific_ projects are better Compound, other savings platforms (I don't want to name them). Centralized exchange savings products are mostly made possible by DeFi, and these are also better products than traditional banks for people like me. Including Coinbase, Binance, even OKEx.

vletal 5y ago

You tried to contradict the claim that the is no impactful application of smart contacts yet you failed to give a single example.

mgraczyk 5y ago
I've been using Compound instead of a savings account for ~2 years. I don't want to suggest any specific other platforms, but if you search "defi savings account" you can see that there are many.

tyre 5y ago

Could you outline why they’re better than traditional banking right now? Gas fees can be hundreds of dollars to interact with a DAO (even simple contracts like Uniswap to get the right tokens is expensive.) There are not banks hacked where people lose all of their money. People lose passwords all the time. With banks, you can get access to your account back. With DAOs, if you lose your private key…RIP. Coin prices are absurdly volatile. This is awful for currencies. The cryptokids point out all the time that 5% inflation means USD is a bad currency. Bitcoin dropped 20% in 24 hours. Imagine you need your savings right now. First you’d have to pay hundreds of dollars to access those funds and then you’d have 20% less than you expected. That’s garbage. Those are things to start off with. Can you make a serious case that DAOs are better _right now_? And if so, which _specific_ projects are better?

mgraczyk 5y ago
Yeah sure > Gas fees can be hundreds of dollars to interact with a DAO It's not "hundreds of dollars" to withdraw tokens from a savings account. More like $50. That's still way too much, but I don't pull money out of my savings account often enough for it to matter. It will get better over time. > There are not banks hacked where people lose all of their money. Not in the US, but there are other countries that exist. None of the DeFi platforms I have ever used have been hacked, but I'm glad for the possibility! It gives me more options in terms of risk vs. reward. > People lose passwords all the time. Yep this one is bad, but there are ways to improve it (social key recovery etc) that people are working on. On the other hand, I've spent a ton of time on the phone with banks trying to get access to my own accounts every time I move. I've never had that problem with DeFi because they don't KYC. > Coin prices are absurdly volatile. Doesn't matter at all, I'm talking about stablecoins. I only really use fiat backed stablecoins, so there's almost no principle risk. Also from this point I think it's pretty clear you don't understand how people use DeFi. Nobody is holding strait unleveraged BTC in a DeFi platform. You would just hold BTC directly, in which case the cost to withdraw would be ~$3 right now. > Can you make a serious case that DAOs are better For me they are infinitely more convenient. I've spent at least 10 hours this year on the phone with banks and financial institutions. I've spent 0 minutes trying to get access to my defi accounts. I use a trezor for cold storage. The rates are better because I'm willing to tolerate more risk (and I think that smart contract and collateral risk for certain platforms is currently mispriced). > which _specific_ projects are better Compound, other savings platforms (I don't want to name them). Centralized exchange savings products are mostly made possible by DeFi, and these are also better products than traditional banks for people like me. Including Coinbase, Binance, even OKEx.