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Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

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Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#41

Post by jnordwick »

nahollander wrote: post #26
kang wrote: post #13

I have looking deeply into lending smart contract protocols - dharma, ethlend, salt, paypie, etc. My biggest complaint is all of them are so-called 'blockchain' products but not only can they be done better without blockchain, but that despite their product being all about decentralization, none of these projects are decentralised!

@kang -- while I don't disagree that there's no shortage of snake oil and hand-waving in the blockchain industry ("Blockchain for X! Huzzah!"), I do disagree with your point about whether there is an efficiency gain to be had from representing debt agreements on a blockchain. The primary benefits are: 1. An ability to trustlessly hold and release digital collateral on an entirely peer-to-peer basis. This entirely rem…

#2 is actually useful.

Now just waiting for the smart contract that bundles a bunch of your tokens and sells structured tranche tokens :)

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#42

Post by arcticfox »

splintercell wrote: post #34
arcticfox wrote: post #15

Earlier quoted context omitted.

Every time blockchain has had a hype cycle over the years I start thinking of ideas to build on it. Then I realize all of my ideas would just be simpler, better, and more monetizable (minus Ponzi hype) if I just built them on traditional technologies.

I think the problem here is that you're attacking the wrong part of the problem. Otherwise, why did you even get excited by the original idea being built on the blockchain, to begin with? Imagine if you thought that it would be a great idea to create decentralized payment system on the internet where people can accept and make payments in a peer to peer manner. Except, this is 2001. There is no such thing as a blockc…

> Not really, it is clearly demonstrated by the popularity of bitcoin in a world with capital controls, WikiLeaks payment sanctions etc.

Everyone I know that is remotely interested in Bitcoin is interested because it may increase in value, it's not popular at all as a payment mechanism outside of illegal circles.

> Most SV technologists would be really excited by the idea of a decentralized, censorship proof forum

Is this really exciting? It sounds like a formula for a cesspool. It seems to me that the challenge in getting anything interesting to happen there is not in the technology, but in the design of the service. There are already tons of places where you can discuss anything that's not actually illegal, including being alt-right. It's just that they're seedy, so nobody normal goes there.

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#43

Post by Daishiman »

unabridged wrote: post #40
arcticfox wrote: post #15

Earlier quoted context omitted.

Every time blockchain has had a hype cycle over the years I start thinking of ideas to build on it. Then I realize all of my ideas would just be simpler, better, and more monetizable (minus Ponzi hype) if I just built them on traditional technologies.

Blockchain is not going to make some traditional company rich. Its going to be used to build things like a decentralized, public web of trust that can be used for open, public uber & airbnb clones.

All those things are laughably far away from being actually useful business ideas.

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#44

Post by arcticfox »

unabridged wrote: post #40
arcticfox wrote: post #15

Earlier quoted context omitted.

Every time blockchain has had a hype cycle over the years I start thinking of ideas to build on it. Then I realize all of my ideas would just be simpler, better, and more monetizable (minus Ponzi hype) if I just built them on traditional technologies.

Blockchain is not going to make some traditional company rich. Its going to be used to build things like a decentralized, public web of trust that can be used for open, public uber & airbnb clones.

> Its going to be used to build things like a decentralized, public web of trust that can be used for open, public uber & airbnb clones.

It's already trivial to build those clones without blockchain if users give up a small amount of trust, and that amount of trust is basically irrelevant to the overhelming majority of users. And the advantages of non-blockchain development, in return, are huge.

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#45

Post by CryptoPunk »

kang wrote: post #13

I have looking deeply into lending smart contract protocols - dharma, ethlend, salt, paypie, etc. My biggest complaint is all of them are so-called 'blockchain' products but not only can they be done better without blockchain, but that despite their product being all about decentralization, none of these projects are decentralised!

I don't understand how you would have self-executing loan contracts and a permissionless platform for trading of debt instruments without blockchains. I see this as an ideal use of the blockchain.

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#46

Post by gbhn »

adrianratnapala wrote: post #38
DennisP wrote: post #31

Earlier quoted context omitted.

In theory, they can be done just fine without blockchains, but in practice, it doesn't always work out that well, especially when the borrowers don't have much money. Matt Taibbi's recent book The Divide described all sorts of abuses, in which loans are sold and resold, the loans' owners swear they have records they don't actually have, courts trust them because they don't have the resources to check, and borrowers l…

This is an interesting point, until now I thought blockchains were only useful for decentralisers, which in turn were only useful for people who wanted something like censorship resistance. But here is a different use-case -- keep records well. Traditional systems are actually pretty bad because of the incentives. My bank statements for example are often very confusing, and online data only goes back 18 months, becau…

While some important records are public, many are not. It isn't obvious that all debtors want the details of their debt made world-readable, for instance.

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#47

Post by jnordwick »

bpforster24 wrote: post #22
jnordwick wrote: post #18

Too bad nobody I their right mind would borrow or lend such an obscenely volatile and deflationary instrument (unless they were going to scam it somehow).

I work at Dharma with Nadav and am happy to shed some light here. Your point is well-taken and definitely a risk. What lenders plan to do, for loans collateralized by crypto, is overcollateralize substantially. So, for instance, in order to take out a 50k USD loan, you may need to put up 2.5-3x of the value in ETH, say 150K USD worth of ETH. This protects against some of the volatility (though definitely not complete…

Why wouldn't you just sell the eth in the first place?

I havent read the whitepaper yet (i will this weekend), but it seems like the collateral is essentially locked up in the contract, so you lose any interest or other opportunity cost.

Even with only current instruments you could synthetically create this loan for cheaper: sell the BTC collateral for USD, buy futures to cover the BTC, invest the unused USD to collect interest..

The problem is that the collateral is locked in the contract and that collateral is another liquid currency.

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#48

Post by mempko »

nahollander wrote: post #2

Hey HN! We're the team behind Dharma protocol, building the infrastructure for the tokenized debt agreements on the Ethereum blockchain. In this code school, we teach you how to build a loan collateralized by a CryptoKitty. We hope you enjoy! If you're interested in learning more visit us at dharma.io or join our chat.

In fiat money systems, banks create new money when they make a loan. If you take a loan from a non bank entity, they clearly can't make new fiat money, so money supply stays fixed. My question is, should these loans be interest free? Because if they are not, there is an obvious systemic issue of economic musical chairs...

Or is the idea these contracts live within the broader fiat systems? I suppose you can use a crypto currency with a growing money supply.

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#49

Post by tehlike »

gbhn wrote: post #46
adrianratnapala wrote: post #38

Earlier quoted context omitted.

This is an interesting point, until now I thought blockchains were only useful for decentralisers, which in turn were only useful for people who wanted something like censorship resistance. But here is a different use-case -- keep records well. Traditional systems are actually pretty bad because of the incentives. My bank statements for example are often very confusing, and online data only goes back 18 months, becau…

While some important records are public, many are not. It isn't obvious that all debtors want the details of their debt made world-readable, for instance.

you can use zeroknowledge proofs for things you don't want to reveal. it's called zk-snarks

Re: Show HN: Collateralized Debt Agreements Using Smart Contracts and Virtual Cats

#50

Post by tehlike »

unabridged wrote: post #40
arcticfox wrote: post #15

Earlier quoted context omitted.

Every time blockchain has had a hype cycle over the years I start thinking of ideas to build on it. Then I realize all of my ideas would just be simpler, better, and more monetizable (minus Ponzi hype) if I just built them on traditional technologies.

Blockchain is not going to make some traditional company rich. Its going to be used to build things like a decentralized, public web of trust that can be used for open, public uber & airbnb clones.

can you provide an example for how uber & airbnb clones be built on blockchain? What would you store, how would it help?
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