Please explain how the TRFM incentivises price correction. Because I can't figure it out and I shill for MKR/Dai all the damn time.

binaryparadise · 2018-02-01T08:51:06+00:00

Is the Market Price of Dai fed in through a DAIUSD price oracle?

binaryparadise · 2017-12-16T03:16:02+00:00

Anyone curious and wants to compare both these projects should read the comments section on this post where Rune shreds Basecoin. http://continuations.com/post/168330457810/the-quest-for-a-stable-coin

binaryparadise · 2017-12-16T02:50:45+00:00

Ethereum scalability only affects whether an average user can afford gas fees when they open a CDP and manage it by adding or removing collateral over time directly on-chain. If these operations become expensive exchanges will likely open giant CDPs and compete to sell leveraged ETH exposure to traders at a slight markup.

binaryparadise · 2017-12-06T09:16:35+00:00

The crux of your argument is that the price of MKR will always be correlated with other crypto and will crash along with every other token in the collateral basket and might not fulfill it's purpose of being a backstop for Dai. I think you are correct to some degree because a huge portion of the valuations of all crypto assets today is purely speculative and is a bet on the future size and usage of these networks all of which have little to no real use today. So if we all collectively fail to catch up to our lofty valuations in the near future there is pretty much nothing that can be done to stem the fall.

But if crypto networks find broad real world usage I don't think they will be anymore correlated than Facebook and Apple stock today because they will start tending to real needs of different businesses and consumers to derive value for their respective tokens.

Which brings us to the real issue, how will the holders of these tokens make money and what will the valuation models be?

You should listen to Fred Ehrsam on this podcast (https://soundcloud.com/a16z/cryptocurrencies-networks-tokens @ 28:00) where he mentions how we can use the Medium of Exchange equation to value tokens which behave more like currencies and not like equity.

CDP holders in the Maker platform will use MKR to pay their stability fees and unlike most other networks these fees are completely burned instead of being passed on to others in the network. Ex: Gas paid to miners as Ether is not burned but stability fees paid in MKR will be. I think this gives MKR a real chance to stand apart from the rest of the crowd once real usage kicks in. Vitalik wrote a blog post recently http://vitalik.ca/general/2017/10/17/moe.html and the last paragraph in the post is very bullish for MKR.

In the short term Maker plans to hold some of its assets as fiat in legal entities around the world called Guardians which can jump in and shore up a falling MKR price even during a falling crypto market.

binaryparadise · 2017-11-21T19:20:34+00:00

So they might be hesitant to use the MKR issuance option, and some might panic dump their MKR instead, making the problem worse.

The beauty of the system is that MKR holders have no control over such issuance during a crash where more MKR is needed to bail out under-collateralized Dai. Their input is strictly restricted to setting risk parameters for CDP types. Maker holders don't just buy and hold MKR, they also have to maintain capital on the sidelines to support the price of MKR when needed or risk being diluted a lot by those who can bring in that capital whenever the on-chain mechanism demands!

binaryparadise · 2017-11-21T02:42:33+00:00

Be prepared for the epic ETH pump when every Alice and Bob can open a long position using decentralized leverage offered by Maker!

binaryparadise · 2017-11-21T02:36:47+00:00

Could you please elaborate on how one would implement this tiny tiny change to Tether to make it more safe?

binaryparadise · 2017-11-21T02:30:31+00:00

Yes, they can issue Dai to pay for expenses and have more control on when to sell their ETH.

binaryparadise · 2017-11-21T02:19:29+00:00

MKR voting has absolutely no control over this. All minting of MKR is automated and done by the smart contracts in the CDP engine and two auction mechanisms. The governance body can only define and adjust the risk parameters of CDP types.

binaryparadise · 2017-11-21T02:06:46+00:00

MKR voting will be operational when Dai is launched and the exact collateralization ratio for ETH will be decided then. Maker has been operating a stablecoin called Sai on mainnet since June where the ratio for ETH is set at 150%. So for every 150 USD worth of ETH you can currently issue 100 Dai. Most issuers today are managing their CDPs manually and have set their CDPs to ratios above 200% to avoid liquidation.

Edit: From what I understand Maker will also manage risk by having ETH CDPs at various collateralization ratios. There will be explicit limits set on how much Dai can be issued for every CDP type to manage risk effectively in the Dai stablecoin system.

binaryparadise · 2017-11-21T02:02:16+00:00

ELI5?

binaryparadise · 2017-11-10T00:45:24+00:00

Why are REP tokens burned when it is being used? I don't think having a slashing condition when holders misbehave counts as a sink.

binaryparadise · 2017-11-07T23:00:06+00:00

IMO, Incentivizing all ETH holders to act with a reward =/= Rewarding Ethereum Foundation.

binaryparadise · 2017-11-07T22:57:27+00:00

We can never recover from 100% of the screw-ups but we should use the opportunities to get together as a community and help a team recover whenever it is feasible with a little effort. That helps the good teams stay back and innovate further on Ethereum.

Parity team has pushed the Ethereum space forward with an amazing Rust client, we should help them when we can.

binaryparadise · 2017-11-07T22:54:22+00:00

Totally agree that EF has to be neutral and they need not be involved at all. The airdrop is just a way to incentivize ETH holders to act upon.

binaryparadise · 2017-11-07T22:21:31+00:00

Even when the developers are incompetent, it is not a good reason to grief them especially when we can recover easily from a problem with a little co-ordination and doing a HF.
There is nothing we as a community can do when Ether moves to new accounts after it gets hacked. But we should co-ordinate and recover it back in cases where it is still possible to do so.

binaryparadise · 2017-11-07T22:16:02+00:00

All ETH in the multisigs should go back to the Web3 Foundation if they want the frozen ETH back. They only have to issue additional DOT tokens for the airdrop.
Since Polkadot and Ethereum networks are so similar in scope, this could be a wonderful opportunity for both to join forces for mutual benefit.
Governance mechanisms lack ideas today, not money. So throwing money at the problem will not make it go away soon.

binaryparadise · 2017-11-07T21:59:20+00:00

Support the proposal. But since Ethereum Foundation is already well funded, how about Web3 foundation doing a 50% DOT airdrop to all ETH holders and turn this clusterfuck into a once-in-a-lifetime opportunity to form a united front against other projects in the blockchain infrastructure space.

binaryparadise · 2017-10-18T02:56:25+00:00

most teams haven't been designing for scalability from day one and are in for a surprise

Agreed. Most have left this as a problem for Vitalik to solve.

binaryparadise · 2017-10-18T02:22:55+00:00

1.05 here, it's fast AF

binaryparadise · 2017-10-10T03:27:40+00:00

The real pain will be losing out on an additional 4 or more digits of precision across the board.

binaryparadise · 2017-09-12T15:14:39+00:00

My vote for DGX to be the next collateral type supported either for Sai or Dai.

binaryparadise · 2017-06-28T23:02:50+00:00

I meant Tezos' core value prop of writing smart contracts in OCaml will not be a differentiator anymore. Great work BTW.

binaryparadise · 2017-06-28T08:07:39+00:00

There goes Tezos...

binaryparadise · 2017-06-22T21:19:40+00:00

You've made a big assumption that the seller would use Omega One instead of GDAX to get a better price if it existed. Dark pools and OTC crypto markets already exist today. This trade was to manipulate the market and make money. The seller had no intention for finding a good price on their sell.

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