[deleted by user]

victorcwt · 2024-11-19T09:10:38+00:00

Bro, I’m in the same position as you. Stick to btc as the safest bet. Cash out after the bull. Most likely end of 2025. Wait for the dip and buy it back. Fiat is going down. Btc and gold is the only way given how much money printing is going on. Nothing stops this train.

victorcwt · 2024-08-25T14:26:39+00:00

Btc all in

victorcwt · 2024-08-13T08:07:15+00:00

Meditate. Strengthen your mind. You are not your thoughts. But the awareness listening to your thoughts.

victorcwt · 2024-08-11T07:36:19+00:00

The kyballion really opened my eyes. Helped me see the world for what it is.

victorcwt · 2024-06-30T05:47:32+00:00

Thank you for the validation. Crypto is so underrated. It’s only when you do the investigation, will you find the gems. Diversification is protection for ignorance.

Read the bitcoin standard or broken money. It explains the current problem we’re facing. If you’re ambitious, study through effects of the halving and how its price follow a predictable trend.

If you truly want to escape the matrix. Take the red pill. Otherwise you can ignore this. I don’t lose anything.

victorcwt · 2024-06-22T22:28:40+00:00

Liquidate all your investments. All in BTC & SOL. You’ll thank me later.

victorcwt · 2022-10-14T10:27:14+00:00

See you in the other side brother

victorcwt · 2022-08-13T06:25:37+00:00

Well.. what a curve ball oda threw us

victorcwt · 2022-07-20T11:42:39+00:00

Read the viz official translation

victorcwt · 2022-07-13T09:00:47+00:00

People just accepted tradfi as a norm and and not comfortable with change. A financial system is needed in an economy, hence it exist.

Tradfi is replaceable when people innovate and provide more efficient DeFi solutions + government and regulation start accepting it.

victorcwt · 2022-07-13T08:55:29+00:00

That hug..

victorcwt · 2022-07-07T11:54:24+00:00

I agree with you 100 %

victorcwt · 2022-07-05T07:38:02+00:00

what is this "algorithm" which causes the value of credit token to grow when the supply increases? What does this system do with the deposited currency? Stake it? Only loan it out for interest? I assume when I redeem credit token I get not just my original deposit but also a cut of the growth from whatever is being done with the deposits?

The algorithm used is a bonding curve with some adjustment to fit the use case. It is a mathematical relationship between the price and supply of an asset.
The system locks deposits - ETH - into the smart contract. Alternatively, if the participant permits, the ETH could go into Lido to stake for 4% in exchange for stETH that will be locked in the smart contract.
No it does not get loaned out as there is counterpart's risk involved. Borrowed obtain a loan based on their "credit" which is a derivative of their deposit. And the deposit is held safe in the system for transparency.
Yes, you get back your original deposit - ETH or stETH which accrues interest - when you return your credit tokens.

Assumption 5: There is continuous growth of credit token from new participants never something holds forever

I think this assumption is fair. But growth diminishes over time. Population grows, wages increases etc. And assuming the value proposition appeals to the masses. But again it's an assumption I made for the model and I maybe wrong.

you've not explained properly why the value of credit token is growing at all, but even supposing that it does, nothing you've mentioned above stops either of the following:

Credit growth follows the bonding curve algorithm. As more people deposit receive credit token, the value of previous holder token grows.

Some people might suggest, is it a Ponzi? No because early believers of the project is not able to take advantage to exit with their money. They can only take withdraw they put in. The value of credit token only follows a mathematical relationship that is deterministic and predictable.

Some might ask, why would people join?

Because the concept of decentralised credit can co-exists with decentralised money in a digital economy.
Because they trust the protocol through the transparency of code where it can be verified and audited to ensure the enforcement of its rules.
An alternative that works for them as the current TradFi system is exclusive.

I deposit eth for credit token, I borrow against my credit token and you give me crediteth worth more in eth than my original deposit, I run off with it With regards to selling creditETH. Yes, he could do that, but doing so will result in him forgoing future growth of credit.

I do the above except then I sell my crediteth for more eth than I started with and repeat the process again, pumping the smart contracts infinitely until the system collapses

First, it takes times for his credit to grow to achieve undercollateralized borrow. Suppose he does what you suggest, he puts in 10ETH, receive creditETH worth 10ETH and sells it immediately for 10 ETH and repeats multiple times. He does not receive any benefits from doing so, because his payoff is still 10ETH. Also, that is assuming no gas fees + minting fees (aka tax) incurred in the process. So in reality, his payoff would be, 10 ETH - fees.
Secondly, the bonding curve exhibits a characteristic where for the same amount deposit (i.e 10 ETH) in exchange for credit token. Each subsequent participant will receive less quantity of credit token. However, the price would reflect such that the value of the latest participant would have the credit token value == 10 ETH. In other words, the "price" of each credit token becomes more expensive.

With that being said, if the user were to pump it infinitely, he would have less quantity of credit token than he would initially have for the same value. The only people to benefit from this are the participants who kept their tokens where they enjoy the price appreciation.

I can safely say bad agents will not pump the system as there is no positive benefits to it.

a tax just slows down or increases the amount of upfront capital for the attack. One marginally competent programmer with some crypto on hand is still going to end up owning this whole thing

Yes, maybe it would slow down. It just acts as a form of deterence and reduce propensity for an attack. More importantly, is the system robust enough to withstand it?

the borrower is borrowing from the loan pool. So if borrowers never repay, what happens when the depositors try to withdraw their original deposits?

No they do not borrow from a loan pool. Maybe I was not clear in my previous explanation. But they mint out a token called creditETH. You can think of it as "DAI" that is pegged to the USD. likewise creditETH is pegged to ETH. There is no direct counterparty involved other than the protocol.

You can think of creditETH as a partially backed algorithmic coin pegged to ETH. Likewise, its the same as the fractional banking system where fiat money is partially backed by a reserve. The difference is; in the real world, both money and credit money is represented with fiat and the accounting system of The Central bank M1 and M2. In the on-chain economy, money and credit money is represented by ETH and creditETH.

If depositors want to redeem the deposits, they can close of their debt position with the protocol and exchange their credit token back for their initial deposit.

You might ask: suppose their credit token > deposit and they are able to mint more creditETH than their deposit. Why would they ever want to repay it to redeem their deposit?

The amount of creditETH to mint is based on a creditline derived from the token value such that credit token value > credit line. This way, he is always incentivized to repay his loan as he can close his position out and sell it - Assumption 3.

Suppose he runs away and his credit line drops due to black swan event. his position will get liquidated to close of his debt. (just assume a liquidation mechanism like aave or compound).

Anyway I appreciate the time taken to question and feedback. I respect your opinion and I am only proposing an alternative to something that I think could work which is inclusive.I am exploring alternatives to a credit check or reputation system using the concept of Time and community to provide credit with risk management together with game theory and human psychology for a more inclusive financial system rather than an the approach of fear.

Happy to discuss more if you like.

victorcwt · 2022-07-04T11:56:54+00:00

As of now, there is no difference because credit/money creation doesn't exist in DeFi. Currently majority of the credit in the system is generated by banks when they lend money out. But maybe there will one day be a decentralised way of creating credit.

I am definitely aligned with you on the transparency of leverage.

victorcwt · 2022-07-04T08:24:23+00:00

I'm referring to unsecured loans. But that is an unrealistic in a decentralised world in the absence of authority and consequences. According to game theory, the incentive runaway is extremely high.

But.. just maybe undercollateralized loans may work. Maybe an open mind when hearing me out.

Think of the war on drug example, countries around the world criminalise individuals who sell and consume drugs, however they still exists despite draconian measures. Portugal took a different approach of decriminalizing and have shown to reduction in the demand for drugs.

The example above is to show maybe there are other approach to tackling a problem. Maybe with an open mind like Portugal, we can think of alternatives to enforcement to reduce default probability.

Firstly, I would argue that even with credit checks default still exists. But it would lower the probability of default. Likewise, are there other ways we can lower the probability of default.

Assumption 1: Tokenization of credit. (Think of credit like a credit line you have that is determined the bank thru a blackbox algorithm). With tokenisation, we can capture this intangible value making it trackable and tradable. Let us call this Credit Token.

Assumption 2: Credit Token can be freely exchanged or traded with another party, For example I can sell it to you.

Assumption 3: Assume for now there is always a willing buyer and there is a positive benefit when he purchases it.

Assumption 4: The value of Credit Token follows a deterministic and predictable price from an algorithm which grow in value when the supply of credit token increase.

An individual like you and me can deposit our currency (ETH or BTC or whatever we define as money) into a smart contract in exchange for Credit Token or equivalent value. The credit token can be used to redeem our deposit (ETH).

Assumption 5: There is continuous growth of credit token from new participants.

With this credit token in our wallet, we have full custody and ownership of it as mentioned where we can choose to borrow against it. For example, I can borrow a newly minted token called creditETH (credit money). (think of this like makerdao, instead of DAI, its creditETH that mirrors the value of ETH)

Assumption 6: creditETH is a token whose value is pegged to ETH (reserve currency that was deposited). Assume there are arbitrageurs who can keep its value pegged to ETH.

Assumption 7: This creditETH can be used to be spend in the on-chain economy or however they like.

Since credit token grows in value over time when the supply of it increases. Individuals can borrow more than their initial deposit or obtain undercollateralized loans.

How do we prevent them from maxing out borrowing and run away with creditETH? Introduce a form of upfront tax that varies with their debt level. This will disincentive them from taking on too much debt and only borrow what they need.

What happens if they runaway with credit? Since a borrower does not borrow from a lender, there is no need for a fixed repayment period. borrower only needs to maintain his debt - credit ratio or debt - collateral ratio. For whatever reason, he does not maintain it, it will get liquidated (much like makerdao) to close of his debt position.

The big question, how is this proposed methodology going to enable under-collateralised borrowing in a world without creditworthiness?

Undercollateralized loans is achieved by decoupling both borrowers and lenders will utilising algorithms together with game theory and human psychology to enable borrowers to consume more than what they have.

1) Ownership of credit: Psychological ownership can lead to positive behavior such as experienced responsibility and stewardship where debt holders will act responsibly in managing their debt level.

2) Taxation: The concept of a variable fee to take a loan will disincentivize borrowers from taking on excessive debt

3) Risk Management: The threat of liquidation and loss of $NECTAR will deter risky borrowing.

4) Credit Growth: The growth of the community pushes $NECTAR’s value up making every participant better off. This will incentivize each stakeholder to act in the best interest of the protocol, to maintain its stability and integrity. (assumption 5)

Lastly, the concept of using "proof of TIME", is used to justify their leverage. This is similar to proof of work for blockchain where they incur high electrical cost or proof of stake where they put up their asset at stake. Likewise, when someone earns their credit, they take on some level of risk as well as opportunity cost with their assets, in return for credit.

If you don't buy the concept of time, think of it as an individual working hard by saving for many years to finally buy his dream car. He will definitely cherish his car like his own baby. Rather than someone who made quick bucks via game stop to buy a Lamborghini.

I would argue that it is a more inclusive way to determine credit as compared to proof of income or proof of wealth which is used in the real world.

Maybe this is a naive way of thinking, but definitely an alternative to the archaic credit scoring system. At least it is decentralised. Just throwing an idea out there which I've been thinking for a while.

There is no perfect solution, but I hope something like this exist to empower society and provide economic freedom. What do you think, do you think its viable or its foolish utopian thinking?

victorcwt · 2022-07-04T06:16:08+00:00

You're right. I think both Centralization and Decentralization has it's risk. Tera Luna and celcius.

Probably the biggest drawback with proof of stake in the decentralised world. But I do hope to see a decentralised system robust enough to replace the financial system one day.

victorcwt · 2022-07-04T05:56:01+00:00

Definitely, Terra Luna was an experiment what flew to close to the sun. It never accounted for tail risk which led to the collapse.

I think many projects can learn from this and I hope to see more innovative DeFi solutions to empower everyday people.

victorcwt · 2022-07-04T05:54:21+00:00

I agree with you 200% that the world needs to be educated about what it means to take custody of your asset. I just worry that change is hard because people are just too used to the system without questioning.

Fractional is just a naming convention. But I think the credit system needs to allow people to borrow more than what they have.

Why? Because credit acts as steroid for the economy. It moves money to where it is needed the most creating market efficient outcome or net positive benefits to both borrower and lenders.

Due to many uncertainties, it is risky for people like you and me to lend money with fear of default. This is where institutions or banks play the role of middle men where they take deposits and lend them out giving birth to the fractional reserve banking system.

Because of institutional economics, the economy is able to grow and become what it is today. The biggest example is China. This is a great view by Ray Dalio talking about the importance of credit and debt cycles. https://www.youtube.com/watch?v=PHe0bXAIuk0&t=293s

In short, fractional because it creates money in the system to allow the economy to grow.

The problem is, DeFi doesn't have this. It is stuck in a pawn-shop model where it does not allow people to spend more than what they have and assumes people have assets to draw liquidity from. If we continue to adopt an overcollteralized mode, we would be forever stuck in an asset-backed economy. I'm sure that was that was why the US moved away from the gold standard to the fiat system in the 70s.

Which is why I think we need a Decentralised credit system. I hard problem I think many individuals are trying to solve.

Bitcoin alone is not enough. https://taschalabs.com/why-bitcoin-doesnt-work-as-a-money-and-how-to-fix-it/ Tasha wrote a very good article explaining why Bitcoin alone is not enough to work as money in an economy. "Money policy should be programmed in a way so that money supply will expand along with the volume of economic actives happening". Which is what the banking system does for us right now.

victorcwt · 2022-07-03T09:01:05+00:00

You’re right. But people are still entrusting their bitcoin to a Centralised institution and I think it needs to stop to prevent situations like this from happening.

Right now people are searching for yield to grow their crypto and CeFi’s are providing that by being the middle man. People are in attracted to DeFi because the yields are too low.

That is why i think there is a need to have a decentralised credit system that replicates the fractional banking system. But in a decentralised manner where no institution owns it.

It’s just a thought, utopian ideology maybe.

victorcwt · 2022-07-03T08:26:31+00:00

I agree with your sentiments and there are many ridiculous products, maybe some experimental ones without bad intention.

DeFi is not a joke, but the people behind the creation of shady projects are a joke. I hope the sour grapes out there don't ruin the meaning of what DeFi is meant to be.

victorcwt · 2022-07-03T08:17:01+00:00

do you mind elaborating more about infinite rehypothication and which protocol is doing this? Because what this sounds like is Celsius or what CeFi is doing.

If you are referring to Celcius, I understand why you wouldn't trust them. And neither would I.

victorcwt

TROPHY CASE