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Basecoin, aka the Basis Protocol

prestonbyrne.com

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Re: Basecoin, aka the Basis Protocol

#51

Post by hashsalt »

DennisP wrote: post #46
hashsalt wrote: post #17

Earlier quoted context omitted.

The issue is that it is uneconomical. Collateral is set at 4-5x. The market for people who want to make that trade is limited.

I know people who do it. They expect a long-term rise in ETH value, but they want to spend some money now without paying capital gains. They use Maker to essentially take a loan out on their ETH collateral. (And yes, they talked with their tax advisors.)

Thats exactly what I had in mind. A reasonably intelligent trader doesnt want to make his operation more capital intensive however. Has use cases, but limited.

Re: Basecoin, aka the Basis Protocol

#52

Post by samfisher83 »

hcmag wrote: post #43

I've worked with these founders over at Google. They were normal, middle-of-the-road SWEs working on some (fairly boring) DoubleClick teams, one of which eventually shut down. In a matter of a year, with no revenue, code, product, or customers, I can't believe they've raised over $100m. Are investors just betting on pedigree at this point? In which case, is a Princeton undergrad degree really worth that much? Moreove…

They must be good at selling if they can convince people to get 100+ million with no "revenue, code, product, or customers." You can't hate on someone for making it.

Re: Basecoin, aka the Basis Protocol

#53

Post by hashsalt »

zodiac wrote: post #28
TD-Linux wrote: post #20

Earlier quoted context omitted.

The author of the OP has an article about DAI too: https://prestonbyrne.com/2018/01/11/epicaricacy/ Doesn't seem so hot to me, and what happens when the bot runs out of capital?

He has a weird definition of "break". At no point did the value of collateralized ether backing each DAI go below $1 or even anywhere close to that. There are valid arguments to be made against a DAI-like system like capital inefficiency, the appropriateness of the bounded volatility assumptions, and maybe sell spirals, but Preston Byrne's articles include a lot of invalid arguments.

Thats precisely his point. Contagion causes the break. Analogous to a bank run or the ruinous fall of the Thai baht in 97/98. Nobody has any real info on whether the bank has enough reserves, nor do they care. They just dont want to hold the asset.

Re: Basecoin, aka the Basis Protocol

#54

Post by iMuzz »

thesausageking wrote: post #31
chrisco255 wrote: post #6

MakerDAO's DAI coin (currently collateralized by ETH) has already proven quite stable in the face of several black swan events and the price of Ethereum crashing nearly 70% over the past couple of months. They're in the process of adding more assets to back the currency to improve stability. The supply is capped by a debt ceiling. There are sound principles behind the currency, and it being an ERC20 token, it's got a…

> several black swan events That word doesn't mean what you think it does. Nothing that's happened since it launched is that unexpected.

Couldn't agree more.

Re: Basecoin, aka the Basis Protocol

#55

Post by hashsalt »

hcmag wrote: post #43

I've worked with these founders over at Google. They were normal, middle-of-the-road SWEs working on some (fairly boring) DoubleClick teams, one of which eventually shut down. In a matter of a year, with no revenue, code, product, or customers, I can't believe they've raised over $100m. Are investors just betting on pedigree at this point? In which case, is a Princeton undergrad degree really worth that much? Moreove…

A16Z also funded 21.co's earlier iteration when they made terrible mining rigs. The cynic in me says they believe the instant liquidity + their brand name will paper over all cracks.

Re: Basecoin, aka the Basis Protocol

#56

Post by [deleted] »

wellboy wrote: post #14

Why can't you simply make a stable coin where you bet long and short at the same time? Bitcoins goes up 5x, you gain from your long and lose from your short. Then, you find an algorithm that balances it out properly, done.

[deleted]

Re: Basecoin, aka the Basis Protocol

#57

Post by panarky »

Before you read this 2000-word treatise, know that the author, Preston Byrne, has a history of misunderstanding fundamental concepts about money and markets.

Example 1: He believes Bitcoin is a fractional reserve system.

https://news.ycombinator.com/item?id=15792314

Example 2: He doesn't understand that market participants bring liquidity to exchanges, so he thinks exchanges themselves go bankrupt if market prices decline.

https://news.ycombinator.com/item?id=15792065

I don't have a horse in the Basis Protocol race, but I have little confidence that this author understands the basics.

Re: Basecoin, aka the Basis Protocol

#58

Post by hisabness »

simias wrote: post #40
hisabness wrote: post #4

Preston takes an insulting tone towards the basis team. Fine to critique, but assumes the visionaries of this project are uneducated, or haven't given things proper thought. I assure you they are thoughtful...

>I assure you they are thoughtful... I thought you were arguing from a position of authority but looking at your comment history all I can find is "I'm a blockchain investor at [redacted]" which leads me to a placeholder website. You'll have to come up with something a little more convincing if you want us to trust your judgment.

If you glance at their whitepaper, stability analysis, or old FAQs they had up, it’s clear they’re thoughtful. Therefore, comments like these underestimate the founders:

“Please. Figure out what a government bond is, first. Then we can have a little chat about scalability.”

"electric boogalo"

"But you need to study politics, economics and history to learn things like this, which I understand are not computer science and are therefore unpopular"

Re: Basecoin, aka the Basis Protocol

#59

Post by wyas »

panarky wrote: post #57

Before you read this 2000-word treatise, know that the author, Preston Byrne, has a history of misunderstanding fundamental concepts about money and markets. Example 1: He believes Bitcoin is a fractional reserve system. https://news.ycombinator.com/item?id=15792314 Example 2: He doesn't understand that market participants bring liquidity to exchanges, so he thinks exchanges themselves go bankrupt if market prices de…

Attacks on the author aren't the best thing in general (https://upload.wikimedia.org/wikipedia/commons/a/a3/Graham%2...)

Re: Basecoin, aka the Basis Protocol

#60

Post by hisabness »

nebulous1 wrote: post #29
hisabness wrote: post #4

Preston takes an insulting tone towards the basis team. Fine to critique, but assumes the visionaries of this project are uneducated, or haven't given things proper thought. I assure you they are thoughtful...

If they actually wrote "one day, Basecoin might become so widely used as a medium of exchange that it actually starts to displace the USD in transaction volume" then they deserve whatever is thrown at them

since everyone in 1792 believed the Buttonwood Agreement would turn into the New York Stock Exchange...
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