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MakerDAO’s “DAI” stablecoin is breaking, as predicted

prestonbyrne.com

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Re: MakerDAO’s “DAI” stablecoin is breaking, as predicted

#71

Post by erikpukinskis »

ves wrote: post #44
erikpukinskis wrote: post #29

Earlier quoted context omitted.

Won't someone learn to play the peg slip robots? If you can hack a PS4 you can trick some simple arbitrage robots. Not saying it's easy, or I could do it... just that it's an inevitability, right? What happens then?

I mean presumably if you’re “tricking the arb bots” you’ve just found some additional arb of your own, which should make the market more efficient, and apparently in this case (I don’t know if this is correct, but this is the claim made by TFA), drive the price towards dollar parity because of this thing’s built in incentives. Or the arb isn’t from dollar parity mismatch but from the bots themselves, in which case it…

> if you’re “tricking the arb bots” you’ve just found some additional arb of your own, which should make the market more efficient

Do these assertions really hold?

1) That if you are able to make money on a market your presence makes that market more efficient

2) That tricking the arb bots into losing their money means you take it

? The Parity hack wasn’t a money-making endeavor, it just burned the cash.

Re: MakerDAO’s “DAI” stablecoin is breaking, as predicted

#74

Post by AroundTheBlock_ »

MicahZoltu wrote: post #68
pjbyrne wrote: post #25

Earlier quoted context omitted.

> They are claiming that over a sufficient period of time the coin will trend towards its target This is not what the MakerDAO team, nor any other stablecoin shill, is claiming. They are claiming the system "ensures" that the stablecoin is "a money that will always maintain its purchasing power." "Ensure" and 'always' don't mean "trend towards over time." They mean always, as in all the time. If their intention is to…

If what you want is "something that always is worth _exactly_ 1 USD then you are asking for the unatainable. As others have mentioned, it is _impossible_ in an open market to have a true 100% no variability peg. Markets work on supply and demand and the instant that one exceeds the other the peg will drift. A good stable coin will have pressures that push that drift back toward the target, but it is impossible to sto…

I mean the notion of "exactly" is nonsensical in so many ways, especially when it comes to thinly traded exchanges. I can sell $1 to my friend for $1.10 break the US dollar. Lol.

Re: MakerDAO’s “DAI” stablecoin is breaking, as predicted

#75

Post by Erlich_Bachman »

xg15 wrote: post #65
Erlich_Bachman wrote: post #59

Earlier quoted context omitted.

Would it not be possible to just destroy some of the coins? If they were destroyed for everyone, proportionally to how much they hold, wouldn't that be in interest of everyone? Because it would make the coin itself worth more?

That would remove supply, but how would it stop dwindling demand? If I have two moldy banana peels worth approx $0 each and I burn one of them, the other will presumably still be worth $0.

The whole idea is that demand will not be 0. If the demand will be non-existent, then none of this is even a problem. If no one wants that coin, it doesn't matter how it works or how many coins are destroyed, etc.

But this whole conversation even comes up because there are people that want to use such a coin. That means demand >0.

Re: MakerDAO’s “DAI” stablecoin is breaking, as predicted

#76

Post by nora4 »

rebuilder wrote: post #56

It seems to me that any decentralized stablecoin would break the impossible trinity. [0] Basically, since the interest rate is fixed (at 0 in this case, I believe), there's an incentive to sell DAI in favour of some higher-yielding currency, which creates a downward pressure on the price. So short of preventing DAI from being sold somehow, in order to maintain a peg, someone needs to pump money into DAI at a loss. Yo…

Why do you say interest rate is fixed at 0. Isn't the whole bond mechanism supposed to introduce an adaptive interest rate?

Re: MakerDAO’s “DAI” stablecoin is breaking, as predicted

#78

Post by zodiac »

splintercell wrote: post #77
zodiac wrote: post #73

Earlier quoted context omitted.

Then what does the feds 2% interest rate target? Nothing?

The fear of Inflation. But USD is not pegged to anything.

Inflation measures USD purchasing power- how do you think that's measured?

Re: MakerDAO’s “DAI” stablecoin is breaking, as predicted

#79

Post by splintercell »

zodiac wrote: post #78
splintercell wrote: post #77

Earlier quoted context omitted.

The fear of Inflation. But USD is not pegged to anything.

Inflation measures USD purchasing power- how do you think that's measured?

So your claim is "USD is backed by X", it's just that I can't see the X, so tell me, what is USD backed by, without mounting an assault on the term "backed by". Backing means, some concrete promise or claim. USD has no concrete claim or promise behind it.
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