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If this was two weeks ago you most certainly would have included UST at the top of this list. People reading this should definitely question the other ones on

If this was two weeks ago you most certainly would have included UST at the top of this list. People reading this should definitely question the other ones on the list as well. what proof do we have that the rest of these coins are really stable?

rglullis 4y ago
No. I wouldn't. Never used Terra, and I already said here that I never understood these "algostables" with no collateral. As for "proof", you should've learned already that there is no such thing as "proof" with any of them. It's all about risk. For the fiat backed, the risk could be measured by the trustworthiness of the institution behind it and how they are managing the real fiat they have in hand. I'll risk them of my list if I hear that any of them is doing any kind of shady (we are collaterized by other assets that are not money) like Tether. DAI and synths also have a non-zero chance of catastrophe, but at least this is mitigated by the over-collaterization. Synthetix requires something like 6x the SNX for each sUSD you can mint and their governance was not afraid to increase this requirement (and consequently reduce their sUSD supply) when their token went down.
- cuteboy19 4y ago
  But Terra did have collateral. Luna equal to 1 USD was burnt (more like locked) once a UST was minted. The whole conceit of DAI is that instead of burning luna at a rate of $1 they would burn it at a rate of $1.5 , The mechanism is exactly the same! And it will fail in exactly the same way.
  - rglullis 4y ago
    DAI has multiple assets, the vaults are at 150% at a minimum and independent from one another and, most importantly, there is no one offering 20% APR on staked DAI. It already went through worse crashes than UST did and it managed to recover. It's far from perfect, but it is certainly more resilient and has shown to be able to pass the Lindy test.
    - cuteboy19 4y ago
      >DAI has multiple assets, And so did Terra. They held AVAX, BTC, LUNA and a little bit of USDC. >150% at a minimum And for Terra this was 100% at a minimum. It makes 0 difference. >independent from one another Cryptocurrency are extremely correlated. >it managed to recover UST itself had recovered from a previous depeg event
      - rglullis 4y ago
        You know what is missing on your list? The 20% APR staking ponzi! You keep pointing out the similarities, maybe it would help to realize that the problem was in the difference?
        cuteboy19 4y ago
        Iron/Titan did not have any such high apy and still collapsed. In case of terra, I concur that the driving force was the Anchor ponzi, but it was the mechanism that failed.
        rglullis 4y ago
        Iron was explicitly under-collaterized, and it was also trying to lure stakers by providing yield-farming. DAI is the opposite, stakers pay the stability fee to open a vault. It did have a yield-farming component (you could mint DAI at 1% fee and put it in the DSR that would pay 2%), but that got completely knocked out in 2020. That crash was already a quite expensive lesson (tens of millions USD) for the MakerDAO team, and a lot of the investors had accepted a haircut in order to bring DAI back to the peg. To repeat: I am not saying that DAI is bullet-proof. What I am saying though is that all the reasons you are using to make your case do not apply to DAI as it currently works.

rglullis 4y ago

No. I wouldn't. Never used Terra, and I already said here that I never understood these "algostables" with no collateral. As for "proof", you should've learned already that there is no such thing as "proof" with any of them. It's all about risk. For the fiat backed, the risk could be measured by the trustworthiness of the institution behind it and how they are managing the real fiat they have in hand. I'll risk them of my list if I hear that any of them is doing any kind of shady (we are collaterized by other assets that are not money) like Tether. DAI and synths also have a non-zero chance of catastrophe, but at least this is mitigated by the over-collaterization. Synthetix requires something like 6x the SNX for each sUSD you can mint and their governance was not afraid to increase this requirement (and consequently reduce their sUSD supply) when their token went down.

cuteboy19 4y ago
But Terra did have collateral. Luna equal to 1 USD was burnt (more like locked) once a UST was minted. The whole conceit of DAI is that instead of burning luna at a rate of $1 they would burn it at a rate of $1.5 , The mechanism is exactly the same! And it will fail in exactly the same way.
- rglullis 4y ago
  DAI has multiple assets, the vaults are at 150% at a minimum and independent from one another and, most importantly, there is no one offering 20% APR on staked DAI. It already went through worse crashes than UST did and it managed to recover. It's far from perfect, but it is certainly more resilient and has shown to be able to pass the Lindy test.
  - cuteboy19 4y ago
    >DAI has multiple assets, And so did Terra. They held AVAX, BTC, LUNA and a little bit of USDC. >150% at a minimum And for Terra this was 100% at a minimum. It makes 0 difference. >independent from one another Cryptocurrency are extremely correlated. >it managed to recover UST itself had recovered from a previous depeg event
    - rglullis 4y ago
      You know what is missing on your list? The 20% APR staking ponzi! You keep pointing out the similarities, maybe it would help to realize that the problem was in the difference?
      - cuteboy19 4y ago
        Iron/Titan did not have any such high apy and still collapsed. In case of terra, I concur that the driving force was the Anchor ponzi, but it was the mechanism that failed.
        rglullis 4y ago
        Iron was explicitly under-collaterized, and it was also trying to lure stakers by providing yield-farming. DAI is the opposite, stakers pay the stability fee to open a vault. It did have a yield-farming component (you could mint DAI at 1% fee and put it in the DSR that would pay 2%), but that got completely knocked out in 2020. That crash was already a quite expensive lesson (tens of millions USD) for the MakerDAO team, and a lot of the investors had accepted a haircut in order to bring DAI back to the peg. To repeat: I am not saying that DAI is bullet-proof. What I am saying though is that all the reasons you are using to make your case do not apply to DAI as it currently works.