5 ms·

Unfortunately, dollars aren't digitally native, or easily transportable. It requires gatekeepers to give permission, which often isn't processed in real time.

sumeno 4y ago
If you don't want gatekeepers I've got some bad news for you about stablecoins.
- whimsicalism 4y ago
  Nobody is gatekeeped from buying Dai, what bad news do you have?
  - sumeno 4y ago
    For now, until they decide to "pause" the blockchain like Terra. Stablecoins are centralized and your ability to use them is entirely dependent on the central authority letting you.
    - out_of_protocol 4y ago
      > "pause" the blockchain Good luck stopping Ethereum > Stablecoins are centralized Only some, like USDT, USDC. Just google what DAI is and how it managed.
      - ironlake 4y ago
        Can Ethereum Classic be stopped?
        whimsicalism 4y ago
        Neither can be stopped unless you control the miners, what do you mean?
        tromp 4y ago
        It can be effectively stopped as long as you control 51% of its hashrate. Then you can just keep appending empty blocks to your longest chain...
      - sumeno 4y ago
        Fine, there's one that's a DAO instead of a central authority, it's hard to keep track of all the different flavor of crypto scams. This one will collapse when a bug is found and someone gains full control instead.
    - whimsicalism 4y ago
      you can't halt Ethereum, the only central authority is the dao
  - polygamous_bat 4y ago
    It's backed by volatile assets that can be wiped out in a flash crash and we all saw how well volatile asset backed securities work in 2008.
    - whimsicalism 4y ago
      > volatile assets It's backed by a multi-collateral set of assets. If they drop below the vault threshold for over-collateralization, they will be automatically auctioned off.
      - salawat 4y ago
        Auctioning causes price movement which can cascade. If markets were straightforward, economics would not be "tge Dismal Science".
        whimsicalism 4y ago
        Which is why the auctions are triggered while eth still has considerable room to fall and also why Dai is multi-collateralized.
        FabHK 4y ago
        What process is in place to guarantee (!) that the price of the collateral does not gap down below the value required to secure the peg? You realise that a stop loss order sell order triggered when an asset hits 100, say, turns into a market order and might be executed at basically any value.
        whimsicalism 4y ago
        There is no guarantee. We are talking about auctions so your discussion of different types of orders is irrelevant. if it dips below $1.45 in collateral for $1, the auctions will be triggered and Dai collateral will shift to USDC & RWA. If the price slips 50% before the auction bots can bid (it is close to instantaneous, so it would have to be an extremely fast crash of more than 50% - which I'm not sure we've ever seen in eth/btc), then you are shit out of luck. This is a risk. But it's not as big of a risk as the stupid reasons these other stablecoins have been failing.
paulgb 4y ago
From the article: > Deus Finance reacted by halting the redemption process in order to try and stabilize the coin.
- out_of_protocol 4y ago
  good thing smart contract can be checked before buying any amount of that coin. Also, DAI exists, which don't have such downside
  - FabHK 4y ago
    So, UST was halted, DEI was halted, but DAI won't/can't be halted? Good to know.
    - out_of_protocol 4y ago
      UST, USDT/USDC, DAI all use widely different methodology to keep themselves stable
    - ck_one 4y ago
      DAI highly depends on USDC, ETH and BTC. If there is a bank run on DAI, they have to sell their collateral which leads to price drop in BTC/ETH which will make the situation worse. USDC, their other collateral, is controlled by a US company and therefore to some extend by the US government.
dralley 4y ago
>which often isn't processed in real time Crypto transactions aren't processed in real time. Most networks can only handle, what, less than 10 transactions per second? Even when you start adding additional layers there is only so much you can do. Realtime transactions with traditional currencies are a solved problem. The UK has had this for years in their banking system, the US will have it by the end of 2023 (FedNOW network).

sumeno 4y ago

If you don't want gatekeepers I've got some bad news for you about stablecoins.

whimsicalism 4y ago
Nobody is gatekeeped from buying Dai, what bad news do you have?
- sumeno 4y ago
  For now, until they decide to "pause" the blockchain like Terra. Stablecoins are centralized and your ability to use them is entirely dependent on the central authority letting you.
  - out_of_protocol 4y ago
    > "pause" the blockchain Good luck stopping Ethereum > Stablecoins are centralized Only some, like USDT, USDC. Just google what DAI is and how it managed.
    - ironlake 4y ago
      Can Ethereum Classic be stopped?
      - whimsicalism 4y ago
        Neither can be stopped unless you control the miners, what do you mean?
      - tromp 4y ago
        It can be effectively stopped as long as you control 51% of its hashrate. Then you can just keep appending empty blocks to your longest chain...
    - sumeno 4y ago
      Fine, there's one that's a DAO instead of a central authority, it's hard to keep track of all the different flavor of crypto scams. This one will collapse when a bug is found and someone gains full control instead.
  - whimsicalism 4y ago
    you can't halt Ethereum, the only central authority is the dao
- polygamous_bat 4y ago
  It's backed by volatile assets that can be wiped out in a flash crash and we all saw how well volatile asset backed securities work in 2008.
  - whimsicalism 4y ago
    > volatile assets It's backed by a multi-collateral set of assets. If they drop below the vault threshold for over-collateralization, they will be automatically auctioned off.
    - salawat 4y ago
      Auctioning causes price movement which can cascade. If markets were straightforward, economics would not be "tge Dismal Science".
      - whimsicalism 4y ago
        Which is why the auctions are triggered while eth still has considerable room to fall and also why Dai is multi-collateralized.
        FabHK 4y ago
        What process is in place to guarantee (!) that the price of the collateral does not gap down below the value required to secure the peg? You realise that a stop loss order sell order triggered when an asset hits 100, say, turns into a market order and might be executed at basically any value.
        whimsicalism 4y ago
        There is no guarantee. We are talking about auctions so your discussion of different types of orders is irrelevant. if it dips below $1.45 in collateral for $1, the auctions will be triggered and Dai collateral will shift to USDC & RWA. If the price slips 50% before the auction bots can bid (it is close to instantaneous, so it would have to be an extremely fast crash of more than 50% - which I'm not sure we've ever seen in eth/btc), then you are shit out of luck. This is a risk. But it's not as big of a risk as the stupid reasons these other stablecoins have been failing.

paulgb 4y ago

From the article: > Deus Finance reacted by halting the redemption process in order to try and stabilize the coin.

out_of_protocol 4y ago
good thing smart contract can be checked before buying any amount of that coin. Also, DAI exists, which don't have such downside
- FabHK 4y ago
  So, UST was halted, DEI was halted, but DAI won't/can't be halted? Good to know.
  - out_of_protocol 4y ago
    UST, USDT/USDC, DAI all use widely different methodology to keep themselves stable
  - ck_one 4y ago
    DAI highly depends on USDC, ETH and BTC. If there is a bank run on DAI, they have to sell their collateral which leads to price drop in BTC/ETH which will make the situation worse. USDC, their other collateral, is controlled by a US company and therefore to some extend by the US government.

dralley 4y ago

>which often isn't processed in real time Crypto transactions aren't processed in real time. Most networks can only handle, what, less than 10 transactions per second? Even when you start adding additional layers there is only so much you can do. Realtime transactions with traditional currencies are a solved problem. The UK has had this for years in their banking system, the US will have it by the end of 2023 (FedNOW network).