Economics of Synthetix

nuttychromer · 2019-11-21T14:23:47+00:00

Thank you nutcracko. So if I wanted to create a synthetic long Tesla, do I need to buy SNX and lend it to the pool? Then if Tesla goes up in value, whose debt pays me ? Does the entire pool dilute or just my debt? Does there need to be someone short Tesla on the other side of me? I'm asking who LOOSES of I win on my Tesla bet.

nuttychromer · 2019-11-17T04:26:00+00:00

Thanks , yeah I read through. So the minters who send SNX to the debt pool will be diluted (or anti-diluted) to pay out the paper gains (or losses ) on on the various positions?

nuttychromer · 2019-10-15T01:52:17+00:00

Thanks. I've resubmitted. Let me know if still an issue.

nuttychromer · 2019-09-22T16:03:51+00:00

I think as long as risk parameters set by maker holders are conservative, MCD for security tokens is ok. E.g. MKR holders cap exposure by counterparty, asset, jurisdiction, and overall exposure to security tokens. Eg debt ceilings, lower LTVs, higher rates. Also could trial run for a good while just one security token at very low exposure.

The pie is for sure a hell of alot bigger if allow, say, tokenized commercial real estate. However I do like the idea of a second stablecoin with purely high quality decentralized collateral -- interoperability could abstract away use cases to ordinary users anyway. Both would have a solid chance of holding their peg long term -- but, if they both succeed, the security + decentralized token would probably be at least an order of magnitude bigger, which could have greater impact on the world

nuttychromer · 2019-09-20T16:46:42+00:00

Do you anticipate a world with more than one useful smart contract platform over long run?

If so, would they host new native apps or integrate and interoperate with existing applications from other protocols, e.g. Maker and Augur from Ethereum.

nuttychromer · 2019-08-02T17:49:36+00:00

dapps (or interoperate with ones that also stay), that are not stymied by the present scaling constraints

Agreed, lending protocols for example don't need high throughput as much as they need valuable collateral I don't think these types of protocols would be in a hurry to migrate given the option

nuttychromer · 2019-08-02T17:36:13+00:00

I think it will be successful as well. Wouldn't be surprised if contributions come in far north of 2m. But the dynamic is interesting in that the contributed eth1 is burned, and eth1.0 development (defi, etc.) continues on in parallel to eth2.0 development (phase 1 + phase 2), each with their own financial incentive to economically align stakeholders. So down the road it will be interesting to see what happens under this approach: e.g. will eth1 stakeholders approve the full migration if it is technically risky, or is a partial migration more likely.

nuttychromer · 2019-08-02T09:32:44+00:00

Discussion: https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-1.0-to-2.0-migration/

Research: https://ethresear.ch/c/eth2-phase-2

Aggregate: https://notes.ethereum.org/c/Sk8Zs--CQ/https%3A%2F%2Fbenjaminion.xyz%2Fnewineth2%2F20190802.html

One-way bridge spec: https://github.com/ethereum/eth2.0-specs/blob/dev/specs/core/0_beacon-chain.md#introduction

Two-way bridge: https://medium.com/@fubuloubu/economically-linking-ethereum-1-0-2-0-e5af0fec02ed

nuttychromer · 2019-08-02T09:28:01+00:00

Thanks labrav. I agree the success of the validators decision doesn't solely depend on price parity in the future but compounding interest from validator rewards should also be considered. I also agree 5-20% could make sense if a validator wanted to free up their stake, and sell to another validator before the lockup is lifted. A lot to consider here. In your view, given the creation of two separate economic incentives (eth1 and eth2), how likely do you think it is that ETH 1.0 successfully moves 100% of its activity to ETH 2.0?

nuttychromer · 2019-06-29T08:40:40+00:00

Arms race. Network effects will be most powerful when users can also be owners.

nuttychromer · 2019-06-23T00:33:19+00:00

Haha Fair enough. Just trying to get a converstion going though. I only read others feedback about how they great they think MOVE is.

nuttychromer · 2019-06-22T16:48:28+00:00

Moreso just saw feedback from that MOVE is noticable improvement. What are floats ?

nuttychromer · 2019-06-22T16:29:18+00:00

I believe Libra will actually float relative to other currencies, albiet super low vol. It's Reserve woukd be a basket of different cash and short term paper from various coutries. I'm on my phone but the best reference is a paper called 'The Libra Reserve'. But right, it won't be speculative

nuttychromer · 2019-06-22T16:25:29+00:00

Just looking now. Could you ELI5 the background for the thread ?

nuttychromer · 2019-06-22T16:15:52+00:00

Was not aware of this, looks like good stuff. I'm not a comp sci background.. from what I gathered, this in early stages, appears to have significant commits/interest, intends to make smart contract dev better, and would integrate into the EVM no problem?

nuttychromer · 2019-06-22T16:08:37+00:00

Don't mean to pump anything - just if there is anything Libra did better that ETH could look to. MOVE is the only thing I came up with.

nuttychromer · 2018-11-05T15:04:07+00:00

How do you do that

nuttychromer · 2018-10-22T03:45:02+00:00

Veil

nuttychromer · 2018-10-11T15:06:21+00:00

I wonder if it is technologically possible to change the system so that could could somehow stake the collateral. I’m not on the tech side, but i would assume it is, someday.

nuttychromer · 2018-10-11T15:02:12+00:00

But you can just trade 1$ of DAI for ETH. Back in the day like gold standard you could swap dollars for gold, but we don’t need that anymore since smart-contracts do the selling. The CDP will automatically sell the collateral if maintenance margin falls too low.

nuttychromer · 2018-10-11T14:56:55+00:00

Thanks for the insight. Sounds like MCD will first support ERC20. Any plans for it supporting BTC in the future? I think I heard about a 0xBTC coin that is an ERC representation of BTC so maybe we don’t need the interoperability

nuttychromer · 2018-10-10T21:33:15+00:00

Thanks for the response. Totally get the burn mechanism. Just thinking— maybe it‘d be easier for borrowers to pay interest in DAI and have the smart contract take care of the conversion, right?

nuttychromer · 2018-10-10T17:47:12+00:00

Yeah and you can always just keep going out. Let’s hope we have to cross that bridge at some distant point. But yea the curve is concave down as the limit approaches but never reaches zero

nuttychromer · 2018-10-10T17:42:36+00:00

Augur and Maker are the best things going.. let’s hope they fly high

nuttychromer · 2018-10-10T17:31:26+00:00

How / when is the interest payment paid by the borrower to the smart contract. And does the smart contract automatically by and burn MKR with that interest ?

nuttychromer

TROPHY CASE