3 ms·
DAI is not an algorithmic stablecoin. It is an overcollateralized stablecoin. They are very very different.
by cdiddy2 4y ago
DAI is not an algorithmic stablecoin. It is an overcollateralized stablecoin. They are very very different.
- throwaway4good 4y agoHow are they different? In core workings they look very much the same to me.
- cdiddy2 4y agoUST actually burns/mints LUNA to try and keep the balance in check. Everything to run the currency is within the same system. DAI requires 150% collateral in a currency completely outside the system that it can't burn or mint. It is a big difference. edit: UST is going to be collateralized in the future if it survives this https://twitter.com/stablekwon/status/1524331190995484672 https://twitter.com/stablekwon/status/1524331190995484672
- throwaway4good 4y agoIt doesn't matter if you lock up something in a contract and sell if it price drops or the dillute existing holders by expanding the issuance and selling it. In aggregate the effect is the same. And they are both run by algorithms.
- cdiddy2 4y agoIf both DAI and MKR go to zero users still have the collateral. If UST and LUNA go to zero then there is nothing left(apart from very recently they started adding some BTC reserves).