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The post states: >"Deus Finance uses DEUS and DEI tokens for their DeFi protocol, where minting 1 DEI requires $1 of collateral. When redeeming, for instance,
by bogomipz 4y ago
The post states:
>"Deus Finance uses DEUS and DEI tokens for their DeFi protocol, where minting 1 DEI requires $1 of collateral. When redeeming, for instance, one DEI, users would get 80% of the value in USDC and 20% in DEUS if USDC was used as collateral for the creation of DEI in the first place."
I've read this same passage 5 times now and I still don't understand it as this sounds very circular. Shouldn't you be able to redeem a stable coin for $1 in whatever currency it is pegged to? Could someone explain how this works?
- rsecora 4y agoIt doesnt work. If you invest 1$, you will pay fees and gas for it. If you try to redeem you will pay fees and gas for another two coins. (Even if they are pegged) If you redeem those tho coins you pay fees. Furthermore USDC aren't $s (and are backed by a company that is loosing value) and deus aren't dollars. Only the issuer and exchanges gain via fees and emissions. Now conversion without fees or gas is 0.5 to 1.
- bogomipz 4y agoThanks for the break down. How is this "meant" to be attractive exactly then? What is the value proposition they are intending here? Why would someone ever buy something a stable coin that they could only ever redeem a maximum of 80% of what they paid for it?