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The DAI algorithmic stablecoin has been around for over 2 years now and hasn't broken its peg (though it has fluctuated around $1 a lot in the beginning). All t

by jcfrei 4y ago

The DAI algorithmic stablecoin has been around for over 2 years now and hasn't broken its peg (though it has fluctuated around $1 a lot in the beginning). All these stablecoins breaking their pegs usually promise some crazy yield one way or another and are therefore much less stable than they appear to be.

polygamous_bat 4y ago
> The DAI algorithmic stablecoin has been around for over 2 years now and hasn't broken its peg Past performance doesn't guarantee future rewards. This same sentence could be said for Terra/UST up until sometimes last week. Afaik the two differences between DAI and UST is 1. DAI is backed by Eth instead of Luna, and 2. DAI is ideally backed to 200%, although the requirements have been adjusted downwards (so < 200%). So explain to me what's backing DAI except for hopes and prayers of cryptobros worldwide that Ethereum is gonna change the world someday, very soon (and probably around when it moves over to Eth 2.0 sometimes in the next 18 months, this time for sure!)
- vmception 4y ago
  DAI is primarily backed by USDC actually, and then ETH. There is a funny argument to be made about that, but you didn't make it. My thoughts are that the MakerDAO (DAI) community existed too early and didn't have other backing options, so gravitated towards centralized collateral for their decentralized stablecoin, despite the irony. There are newer communities of stablecoins with a similar design to DAI that chose different decentralized collateral options, and are functioning just as well. None of them are perfect though, usually some baggage with the founding team, or a shitty governance platform. But they're working okay. My only point here is let's just criticize the accurate thing.
DebtDeflation 4y ago
The whole idea of stablecoin yield is a scam. Generating yield by staking is a literal ponzi scheme. Generating yield by loaning means taking on default risk so your stablecoin is no longer stable in that you can lose principal. The regulators are asleep at the wheel. All the people posting "Yoooooooo! 20% yield on my stablecoin. Living large!" on Instagram will be the first to demand that the government "do something" when their life savings evaporates overnight.

by jcfrei 4y ago

polygamous_bat 4y ago

> The DAI algorithmic stablecoin has been around for over 2 years now and hasn't broken its peg Past performance doesn't guarantee future rewards. This same sentence could be said for Terra/UST up until sometimes last week. Afaik the two differences between DAI and UST is 1. DAI is backed by Eth instead of Luna, and 2. DAI is ideally backed to 200%, although the requirements have been adjusted downwards (so < 200%). So explain to me what's backing DAI except for hopes and prayers of cryptobros worldwide that Ethereum is gonna change the world someday, very soon (and probably around when it moves over to Eth 2.0 sometimes in the next 18 months, this time for sure!)

vmception 4y ago
DAI is primarily backed by USDC actually, and then ETH. There is a funny argument to be made about that, but you didn't make it. My thoughts are that the MakerDAO (DAI) community existed too early and didn't have other backing options, so gravitated towards centralized collateral for their decentralized stablecoin, despite the irony. There are newer communities of stablecoins with a similar design to DAI that chose different decentralized collateral options, and are functioning just as well. None of them are perfect though, usually some baggage with the founding team, or a shitty governance platform. But they're working okay. My only point here is let's just criticize the accurate thing.

DebtDeflation 4y ago

The whole idea of stablecoin yield is a scam. Generating yield by staking is a literal ponzi scheme. Generating yield by loaning means taking on default risk so your stablecoin is no longer stable in that you can lose principal. The regulators are asleep at the wheel. All the people posting "Yoooooooo! 20% yield on my stablecoin. Living large!" on Instagram will be the first to demand that the government "do something" when their life savings evaporates overnight.