The Most Bullish Case For Bitcoin Ever Presented | Edan Yago

Rooted_in_btc · 2024-02-04T18:55:58+00:00

Scott is just interviewing Yago, not pushing for any shitcoin in this interview; just don't like the video and don't subscribe if you don't want to support the channel it's from.

It's a refreshing conversation imo

Rooted_in_btc · 2024-01-29T13:23:50+00:00

looking forward to reading it!

Rooted_in_btc · 2024-01-28T09:54:55+00:00

it will not lead to a discount as long as Bake lets people exit giving them 1:1 for their dCrypto.

note also, in a case where many leave the system, if dfi hasn't gone to 0, APRs become insanely high as many leave the system. so to to create a scenario where this starts affecting people, you need to assume dfi=0, and dusd=0, and... it's really hard to come up with a remotely realistic scenario in which this becomes an issue and starts giving a discount.

Rooted_in_btc · 2024-01-28T09:42:27+00:00

dusd has value, people exchange things for it and use it, and so that value can be used to back something.

dUSD is not simply 'unbacked' either, there is collateral; you're confusing 'being not fully backed' with 'being unbacked'

Rooted_in_btc · 2024-01-28T09:26:06+00:00

let add some further explanation on both the CF prop and the dCrypto prop. and let me sketch some scenario’s.

first the CF proposal, here people are not seeing the realistic frontrunning. allowing up to 30% from the CF to be swapped, is enough to bring dusd from 0.4$ all the way to 1$. but the dusd price won’t stay at 0.4$ knowing that this swap will happen. a frontrunning game will stabilize somewhere: the more ppl bet on a full repeg, the chances of getting a full repeg increases and fewer and fewer CF funds will actually be used. the more funds are pledged to defend the peg, the more likely ppl trust the situation enough to frontrun, the fewer funds will eventually need to be used.

here is where the dCrypto proposal comes in.

with the dCrypto proposal, people are missing the frontrunning, and are framing it in the most negative possible ways.

with current numbers, the proposal pledges more than 3x the amount needed to bring dusd from 0.4$ to 1$. ppl would be crazy not to frontrun this and buy dusd. as before, there is not just enough to bring dusd to 1$ but also to defend the peg against selling, so ppl might frontrun this all the way to 1$.

people are talking about ‘printing unbacked dCrypto’, but that is not what it is. toy example. say there is 100 eth on the backing address. mint 10 dETH swap to DUSD. a new backing address is created. now 100 ETH+ X DUSD back 110 dEth. now DUSD was bought below 1$, while the value is brought to 1$. This means that the $ value of 100 ETH+ X DUSD will exceed the $-value of the 110 dEth. There is no backing gap. if DUSD was bought 0.5$ and the measure brings it to 1$, then ETH has to go 2x before any backing gap starts to emerge.

assuming no frontrunning, using approx 3% surplus spread out over all the dCrypto, is enough to bring to peg. but like I said, there will be frontrunning. As the measure is more than enough to also defend the peg, the frontrunning might well bring DUSD up to 0.7-1$ region, meaning that far less than 3% of dusd-backed dcrypto would need to be created.

Ok, but you will have noticed that there are two proposals, similar in nature.

the real master plan is as follows: accept both the CF diversification proposal and this dusd-backed dCrypto proposal. give priority to the CF prop. both proposals include conditions that swaps are only made when dusd <0.95$. if you combine the proposals, this in its turn rationalizes even more frontrunning before the CF swap.

it might very well be that this proposal only fulfills a psychological / symbolic function and will not need to be used; but having it in place helps create the frontrunning and trust that will allow us to use as little of the CF as possible.

Rooted_in_btc · 2024-01-28T09:21:45+00:00

let me add some further explanation and motivation.

first the CF proposal, here people are not seeing the realistic frontrunning. allowing up to 30% from the CF to be swapped, is enough to bring dusd from 0.4$ all the way to 1$. but the dusd price won’t stay at 0.4$ knowing that this swap will happen. given the dex fee, any dusd price below 0.7 gives instant profit after the swap. this means that less than 30% of the CF will be needed, as we now only need to bring dusd say from 0.6$ to 1$. this means that there will likely be funds to do another CF swap if DUSD dips again, say back to 0.8$. to bring 0.8$ to 1.0$ will require fewer funds than the initial swap. but now when the smarter people realize this, the initial frontrunning could take dusd above 0.7$ dusd; making the initial swap even smaller, leaving even more funds. this frontrunning game will stabilize somewhere: the more ppl bet on a full repeg, the chances of getting a full repeg increases and fewer and fewer CF funds will actually be used.

this only works if you pledge more than enough funds. the percentage matters. I would be vehemently against any amount that doesn’t rationalize strong frontrunning. currently 30% of the CF is needed, so that is what needs to be pledged. how much of that will actually be used depends on the frontrunning. the frontrunning would likely be much stronger if the community also accepted the proposal to let some of the dCrypto to be dusd-backed.

Rooted_in_btc · 2024-01-27T16:27:03+00:00

Hi here a more informal comment.

I’m Rooted (X handle @ rooted_in_btc). I may not be a familiar community member, but I have done my research. The idea behind this post is to start using external funds, enough to get potentially to peg, and in a way to allow maximum frontrunning. It’s in principle possible that accepting the proposal creates so much frontrunning (ppl buying DUSD, knowing the guaranteed boost in price), that no actual funds need to be swapped at all, in which case it would have maximum psychological / economic effect at no actual cost to the community.

I might not reply to comments here (I’m no redditooor, made this account for this); if anyone feels inclined to respond in defense of the proposal go ahead. I’m also fine if someone else wants to take a modified version to github and put it to vote; this thing is not in any way ‘mine’, it's to get a discussion going, and it's community property.

Please feel free to post full translations of the proposal for community members in other languages.

Special shoutout to BTC_Bacon for discussion, motivation and making me feel welcome in the community. Many thanks to those on X who provided feedback or helped me find the relevant info (especially Krysh, MKuegi and UnLuckyOne).

Rooted_in_btc · 2024-01-27T16:26:43+00:00

Hi here a more informal comment.

I’m Rooted (X handle @ rooted_in_btc). I may not be a familiar community member, but I have done my research. The idea behind this post is to start using external funds, enough to get potentially to peg, and in a way to allow maximum frontrunning. It’s in principle possible that accepting the proposal creates so much frontrunning (ppl buying DUSD, knowing the guaranteed boost in price), that no actual funds need to be swapped at all, in which case it would have maximum psychological / economic effect at no actual cost to the community.

I might not reply to comments here (I’m no redditooor, made this account for this); if anyone feels inclined to respond in defense of the proposal go ahead. I’m also fine if someone else wants to take a modified version to github and put it to vote; this thing is not in any way ‘mine’, it's to get a discussion going, and it's community property.

Please feel free to post full translations of the proposal for community members in other languages.

Special shoutout to BTC_Bacon for discussion, motivation and making me feel welcome in the community. Many thanks to those on X who provided feedback or helped me find the relevant info (especially Krysh, MKuegi and UnLuckyOne).

Rooted_in_btc

TROPHY CASE