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Listen, I don't like stablecoins either. But what's the sudden obsession on HN with collateralization of blockchain assets? Algorithmic pegs are far more inte
by jMyles 4y ago
Listen, I don't like stablecoins either.
But what's the sudden obsession on HN with collateralization of blockchain assets?
Algorithmic pegs are far more interesting and democratic. That scammers have discovered they can push ponzinomics out the door as well does not change this.
- Denvercoder9 4y agoThe point of stablecoins isn't to be interesting, it's to be stable. Be as boring as possible, please.
- jMyles 4y agoWhat proof do you need that collateralization, replete with shady or non-existent audits, is not a source of stability, and that something interesting, like approaches using pure mathematics, are more auditable and, in the short- and perhaps long-term, more stable? The dream collateralized stablecoin, audited in some transparent way, is still vulnerable to a good old fashioned heist. The gatekeeping of all projects that don't see the bank vault as the holy grail of community economics feels unbecoming of HN to me. This is creativity and science at work. Again, I understand that, in addition to sincere efforts to find an algorithmic solution, we get ponzi scum peddling their things. I don't understand why people buy those, and that's an element of human nature we can hopefully overcome as this process goes on. But you're watching collateralized coins fail, and your response is, "the only valid approach is collateralization!" ?
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- ahtihn 4y ago> that something interesting, like approaches using pure mathematics, are more auditable and, in the short- and perhaps long-term, more stable What approaches? Do you know of a known approach that isn't flawed in some way? Until proven otherwise, you can't create a stable coin with "pure mathematics".
- jMyles 4y agoObviously your comment is a sideways jab at DAI. But why? What's the problem? That it hasn't been able to scale? Or something? DAI is imperfect, but I think it's a sincere effort. It hasn't scammed anybody and doesn't appear capable of doing so. And more and better efforts will follow.
- tinco 4y agoYou get it slightly wrong, the problem isn't that they're interesting. The problem is that they're marketed to be profitable. The most interesting stable coin is DAI. It's not particularly profitable, and it's stable and it will be stable no matter what.
- rtkwe 4y agoAlgorithmic pegs are inherently vulnerable to mass down turns. Which makes them mostly useful for only very short term transfer use instead of even multiday holdings.
- jMyles 4y agoDAI has just survived a massive down turn. I think your point is broadly sound, though. But it's not an argument against algorithmic pegs; it's an argument against stablecoins _in principle_. And on that point, I agree.
- FabHK 4y agoNo. A currency board (a stable coin that is 100% backed by the underlying) is theoretically sound, if boring. An algorithmic stable coin is fashionable nonsense.
- jMyles 4y ago> theoretically sound "theoretically" here means, with cooperation from the local state, who agrees not to seize the assets. And cooperation from the local organized crime syndicate, who agrees not to seize the assets. And with a consensus-driven on-chain oracle representing the auditing process, the key custody of which is entrusted to... someone. I'm just baffled that on HN of all places we're saying we prefer violent paleo-economic solutions to mathematical verifiability.
- FabHK 4y ago1. There is no mathematical verifiability for a purely algorithmic stable coin. You're dreaming of a mirage. A perpetuum mobile. 2. Your mathematically verified coin offers no protection against the state or crime syndicate, either (see xkcd about 50 years ago).
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