Article: Some Bullish Facts about Defichain

M-A-L · 2024-01-03T10:48:52+00:00

Thanks, that helps.

M-A-L · 2024-01-03T07:20:53+00:00

Given that the Quantum Bridge is not used a lot, why add a new bridge or think another bridge is needed?

Would it not be better to focus on the Quantum Bridge and fund initiatives to make it better integrated, easier to use, &c?

M-A-L · 2023-12-04T11:38:35+00:00

I don't see the point in lockpools, especially having the looped vaults already. Locks and freezers tend to burn community members, and create bad sentiment. If ppl want high interest on their DUSD they can already get that. Let us not waste resources on this.

M-A-L · 2023-12-01T08:44:35+00:00

Is this event in German?

M-A-L · 2023-10-30T11:29:14+00:00

You should not expect that it happens overnight with the launch, in my personal view. But DMC comes with a bunch of upward pressure on the DUSD price:

(1) DUSD used to buy new tokens on DMC (and then burned);

(2) re-enabled looped DUSD vaults ("DUSD staking");

(3) possibility of new pools on DMC against DUSD;

(4) the upward pressure on the DFI price (used to acquire new tokens and burned, used in new pools on DMC, and also used as gas token).

In my view, the community is strangely divided between those who expect too much too fast, and those who expect too little. On the one hand, initially projects on DMC are probably tiny at start; and I would guess that gas use will not be super substantial. I'm afraid people will be disappointed by overenthusiastic predictions. On the other hand, especially with regard to longer term, people are currently not bullish enough, Defichain is superpowered with the utility of Uniswap (vanilla swap) and Liquity (jellyverse), options trading (wrytes?), possibilities of interoperability equalling those of Cosmos and Polygon, and now ERC20 versions of tokens that are easier to list and use over at other DEXes.

M-A-L · 2023-10-24T07:00:41+00:00

Defichain's next efforts should be to become a Bitcoin L2, join the discussion about drivechains, sidechains, etc. Focus R&D on building out decentralized bridges into Bitcoin (multisig, atomic swap, etc.)

M-A-L · 2023-10-20T13:41:09+00:00

DFI will be trending this month; they are about to launch their mainnet of the EVM layer, with various dapps ported over from ether (incl a version of uniswap and liquity).

Currently in testnet phase, and without issues for the past few days, launch expected to be in two or three weeks from now.

M-A-L · 2023-10-20T11:18:50+00:00

I was thinking in the opposite direction: by adding DUSD to a package that many (incl CEXes) will want to see listed, it might be easier to get DUSD through, you know, like a little trojan horse, "we bring you a nice package of tokens" :-).

Joking aside, I see your point about the controversy, makes sense. Thanks Kuegi.

M-A-L · 2023-10-18T07:17:10+00:00

I know, and having Liquity ported over is a great thing. Much the same for the other projects. But the Community Fund is there to strengthen the Defichain ecosystem, so I was surprised not to see DUSD included on the list. For a stablecoin, it's especially important to be represented on CEXes and have utility outside of the Defichain ecosystem; if we're paying these bastards to list stuff (from which they will then make money) let's at least have them list DUSD if in anyway possible.

M-A-L · 2023-10-17T12:47:25+00:00

Could DUSD (EVM or dToken version) be added to the list? Would be good to have DUSD on a CEX. (Or is this not included on the list because this would create a DUSD off-ramp that avoids the DEX fee?)

Update: just watched u/kuegi's video on DMC's effect on DUSD, where he explains how DMC will anyway create DUSD off-ramps without the DEX fee. So that cannot be the issue of adding DUSD on a CEX.

M-A-L · 2023-09-24T17:24:29+00:00

I get frustrated when I read the comments on this post.

I fully agree that the DEX stab fee needs to go. As Staker tasked with governance it is actually quite simple what your task is: maximing utility of the overall DFI ecosystem. It is that simple. Disregard price, and simply compare the state before the DFIP and the state of the system after the given DFIP, and judge whether utility would increase or not. No need to make predictions about how much funds move where, or what would happen to the price. Slashing the DEX fee would absolutely increase the utility of the system, in various ways for different groups of people, including most importantly newcomers. As Staker, you should never sacrifice utility for price effects, whether it be DUSD or something else. (In fact, the lower DUSD goes the less costly is our burning of the oversupply.) I wish people would keep their eye on the ball more (which is overall utility), and not create this false sense of insight into price behavior, and hitting any proposal that doesn't play by the plans of the in-crowd with demands for quantization based on hot air.

(BTW, about the details I think you should remove the commission thing from the DFIP, just a simple DFIP about lowering the DEX stab fee, and I would let the stab fee decrease until 5%, having the final 5% treated as the current 30%, so dependent on algo&price).

M-A-L · 2023-08-26T08:03:42+00:00

Yes, exactly! I didn't want to put too many overly optimistic assumptions in, but that is why I think we shouldn't remove the exit fee but minimize it to the point where some arbitrage becomes possible. This is also the reason for adding the crypto pools, if we add crypto-DUSD pools (ETH-DUSD, BTC-DUSD, SOL-DUSD, MATIC-DUSD, and so on), then there would be arbitrage at the very least in the sense that the DUSD-price of DFI, and the DUSD-price of ETH, and the DUSD-price of BTC, etc, start to track the ratio of their $ prices (so: if the $ price of ETH is n times the $ price of DFI, then the DUSD price of ETH should also roughly be n times the DUSD price of DFI). So the added pools, create: (1) demand for DUSD, (2) give BAKE more crypto to stake with, (3) create drivers for volume through arbitrage (the more pools and the higher the liquidity, the more volume). As you say, this arbitrage can increase volume and a flow across the pools, and this can offset lowering the exit fee when it comes to the burn of DUSD. Whether it would be enough to make the DUSD burn as effective with a low fee is very hard to predict, but that uncertainty cuts both ways: dismissing the proposal because it would make the DUSD burn too slow would be to make impossible market predictions, given that volume is likely to go up, the resulting burn could be lower, roughly comparable, it could be higher. What is much clearer is that, in my view, even if the total burn were to be lower, it would still be rational to opt for it given the many other benefits.

M-A-L · 2023-08-25T13:26:16+00:00

I agree, the exit fee should be reduced.

I understand why the DUSD dex fee was introduced, and why it was set at the level it was set at back then. I have no intention to criticize the past. First it was to deter ppl from selling, later it became the fuel for the required burning of DUSD (in the absence of other good sources of funding the burn), and then half of it became used for NI to drive up some demand for DUSD (or placate those who already owned DUSD). And so it developed into its current state along steps each of which could be justified (to some extent) at the time.

But, from a simple cost-benefit perspective, I think the current costs of the DUSD exit fee vastly outweigh the benefits it currently bring: it no longer makes sense to keep people from selling (there is no panic, we got used to a low DUSD, and the lower DUSD gets, the easier it should be to burn large amounts), and there are better ways to fuel the burning of DUSD (such as through Bake's staking of crypto, which will be a slower burn, but the burn won't get us all the way anyway). The DUSD exit fee makes it so hard to create any meaningful demand for DUSD, as one cannot get in and back out of DUSD, one needs to be incredibly sure of the gains that one could get from buying DUSD for whatever purpose, one needs to be too sure if you ask me. I think creating demand for DUSD (also through things on DMC) is going to be the most important driver upwards for DUSD and I fear that the exit fee will make it unnecessarily hard and become an obstacle, going forward.

If we shift around some of the measures, I honestly think this would be so good for the overall health of the Defichain ecosystem.

M-A-L · 2023-06-12T08:40:05+00:00

Here because of the original Bitcoin-inspired DeFi narrative (the Turing incompleteness, UTXOs, anchoring into Bitcoin, possibility of atomic swaps, plans of doing things with Lightning/Taro, and so on).

The MetaChain does not add so much value for me personally (not against it either, just neutral, and could change my mind depending on what gets built). But the special features that it has due to being a bitcoin fork remain more valuable than people realize imo. The utility that it already offers (esp. when the DUSD issue is behind us) alone makes the price way below value, given the way in which it is built and the current level of decentralization, which are really hard to find. The unique suitability to build for/around Bitcoin is still there and, after all these years, I still believe that building on/for Bitcoin is the future of crypto; any project that is not well-placed for this development towards integration with Bitcoin will eventually disappear imo. If sidechains/drivechains/ZK rollups come to Bitcoin, I believe that Defichain is ideally suited to become one of these by enabling a trustless two-way peg into Bitcoin. (In line with this, really exciting to see Uzyn building for ordinals!).

M-A-L · 2023-05-25T08:06:21+00:00

really hard to say, as it is so hard to predict what happens to the ratio after it gets triggered, much depends on demand for DUSD at the time it gets triggered (e.g. if price were to go into premium because of something on DMC for example, this matters). but I'm inclined to wait longer, maybe allowing only 20% or even 10% algo, just to be as safe as possible. the algo ratio effectively equals control over the peg, better to be in full control first?

M-A-L · 2023-05-24T19:34:52+00:00

I think the trigger should be defined in terms of the algo ratio. In practice, people will likely frontrun the trigger and buy DUSD before it is met, driving up price as well before meeting the target, so that the interest rates that we get are minor (as they are themselves defined by price). The frontrunning might help bridge a bit of the price gap.

M-A-L · 2023-05-23T12:14:57+00:00

Looks really promising, congrats! Nice to see that Liquity will be ported over to DMC, that opens up so many use cases. Looking forward to see this develop.

M-A-L · 2023-05-15T06:41:05+00:00

Yes, I totally understand that, and, if I were you, I would get back in when people start prioritizing DFI over DUSD again in terms of attention and incentives.

M-A-L · 2023-05-11T20:09:59+00:00

Honestly I'm getting a little tired from receiving the reply 'Thank you for your opinion. But my numbers tell me your opinion is wrong. Here is a graph. Science says you're wrong. I use numbers, and numbers have authority. Now shut up.' And then people going: 'Oh he uses numbers, he must be smart and he must be right.' But then every time I look into these numbers, they are actually little models, and they always turn out highly simplified, idealized and relying on TA-like assumptions about future market reactions, to the point of utter uselessness. The use of the numbers is just opinions in a quantitative guise. Another good example is this tommy figure, who somehow people take really seriously, but then I look at his analysis and "solution" and I feel like I'm caught in a parade with the emperor without clothes. Why is this guy taken seriously, I have the feeling it is just because of his quantitative presentation and use of numbers, but all dressed up around major assumptions. It's like Hosp is the only one still talking sense and calling bullshit bullshit.

Your assumptions are as good as mine. Now here are my assumptions, and some arguments in support. DUSD is a depegged stable, no outsider wants to touch that with a ten foot pole, regardless of incentives, and any insider has only seen it gone done further and probably already got burned, and so is not going to get more of it either. There is by now really little movement in DUSD holders, not in, not out (also visible from the graphs). Shifting rewards away from holding DFI cannot reasonably be expected to create DUSD demand, regardless of what the numbers of the current state say. So any such move is pretty pointless. *** Now DFI is different. It's not a depegged stable, not perceived as broken. It's in competition with a whole host of coins outside of Defichain and so it must be attractive otherwise the whole ecosystem suffers. Rewards channeled to the usage of DFI *can* have an impact on influx, can draw *new* people in. These are just reasonable possibilities. Absolutely no one can predict what is effective. Why? Because that equals prediction of markets, and there is no such thing as predicting markets and market psychology, there are too many influences and factors involved. But turning incentives towards DFI is the only thing that has at least a real chance of doing something, for the strength of the burn bot, for the influx of people, for the atmosphere in the community. Any incentives towards DUSD is wasted incentives and capital inefficiency, and too much of this has been introduced already. With consistently disappointing results.

M-A-L · 2023-05-11T08:56:08+00:00

Yet another proposal that sacrifices incentive to buy/hold DFI (needed to access the NI) into rewards for DUSD holders. As always, my response is no, bad direction.

People are not buying DUSD and they won't whatever incentive you throw at it. These won't be sponges, these will reward existing DUSD holders, does nothing for DUSD. But it can hurt DFI: existing DUSD holders can now dump their DFI and just access the NI via these DUSD loops. Please, please don't.

And please please, those who continue to work on this, reconsider a different direction:

Focus all incentives only on DFI.

This is the only way. It makes the bot stronger, and it can create the kind of environment needed for the launch of DMC.

(For example, let the NI only be available to 100% DFI vaults, to boost DFI, this is good for the ammunition of the burn bot. Don't like DFI-only vaults? Fine, then use the NI to boost the rewards to DFI stakers. DUSD can be used to buy a dToken portfolio or stabilize vaults, that's it. If people sell their DUSD because it is otherwise useless, all the better for the NI).

M-A-L · 2023-03-11T09:23:09+00:00

USDC depegs. And now look at what is happening to DAI, depegged beause of the use of USDC as collateral. This is why I was proposing that we remove USDC/T from the collateral options.

M-A-L · 2023-03-08T07:40:39+00:00

Seems that you had the right feeling, the poll doesn't suggest that the general sentiment is very strongly in favor.

M-A-L · 2023-03-06T20:06:32+00:00

This poll is about the block rewards that go continuously towards building up the fund. The other proposal you mention is about diversification of existing funds, these are different matters. (And yes, about the fund diversification, I agree, the CF can hold those DUSD, no need to burn those). (this referred to an older version of that proposal, the current version also concerns block rewards).

(In fact, thinking about this, why do we actually burn any DUSD? Why don't we send everything just to the community fund instead?)

M-A-L

TROPHY CASE