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MakerDAO gets stress tested as ETH price plummets

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Re: MakerDAO gets stress tested as ETH price plummets

#91

Post by rolltiide »

perl4ever wrote: post #85
rolltiide wrote: post #81

Earlier quoted context omitted.

> but your comments sound like "we have a proof of concept that this issue could be solved, therefore it is solved". What? No. This is about more people showing up to a foreclosure auction because they heard about the guy that bid $0 by being the only person at the foreclosure auction, and flipped a property for $4mm. And then you have an actual market. The auction house itself doesn't need to be patched. The auction…

I just feel like it's a typical libertarian comment that markets solve things because they will probably react eventually . It's not wrong to expect the feedback, but in the meantime, havoc that affects people occurs. That legitimately can affect peoples' opinion of a process.

The problem with marginalizing it to "libertarian" means that you imagine that it is a future ideal reality for libertarians that doesn't already exist, while you simultaneously don't even entertain the argument presented. Cognitively negligent.

If the auction didn't happen, then there would be a software problem to fix and a criticism of trusting MakerDao and "decentralized finance" smart contracts. If the auction did happen, and only 1 person showed up and bid as low as possible, there isn't a problem.

I was on the MakerDao video conference, and people suggested software tweaks such as a minimum, and people pointed out that it wouldn't make much of a difference for the person that got liquidated and if the market actually was moving faster (like it was at the time) an arbitrary - but software hardcoded - minimum would have disrupted the auction anyway.

The only thing that happened here is nobody showed up to the auction. Now you and thousands of other people know that there is an opportunity to be the only one at a auction, and non-existing UI prevents a crowd from being notified and showing up. And yet, if you want the opportunity to make millions, you'll figure it out, and so will other people, and you will start to outbid each other.

Re: MakerDAO gets stress tested as ETH price plummets

#92

Post by ficklepickle »

rhlsthrm wrote: post #45
lalaland1125 wrote: post #39

Earlier quoted context omitted.

> If you need to lock up 1.5 USD for 1 USD, you may as well go get 1 USD. It's a dumb idea to use 1.5 USD to get 1 USD. DAI locks up 1.5 USD of ETH, not 1.5 USD. There is an important difference. The main benefit/use of DAI is that it effectively lets you increase your leverage when you are betting long on ETH. The trick is that when you lock ETH in the contract you can then use the resulting DAI to purchase more ETH…

The real idea here is even beyond going long on ETH. It's multi collateral DAI. The idea that you can (eventually) lock up any collateralized asset and mint DAI. Need to take out a mortgage on a property you own? You can do it automatically and atomically through smart contracts without any middlemen. Eventually people could tokenize things like their future earnings and take out a loan against that now. As dystopian…

How do you prove you own the physical asset you are collateralizing?

How do you prove you will have future earnings to borrow against?

Do we use the existing systems (legal, credit score, etc) or something new?

I'm genuinely curious, I don't know much about cryptocurrencies.

Re: MakerDAO gets stress tested as ETH price plummets

#93

Post by perl4ever »

nootropicat wrote: post #89
perl4ever wrote: post #84

Earlier quoted context omitted.

Here you go: "An Ohio man was arrested for his operation of Helix, a Darknet-based cryptocurrency laundering service. In the three-count indictment unsealed Feb. 11 in the District of Columbia, Larry Harmon, 36, of Akron, Ohio, was charged with money laundering conspiracy, operating an unlicensed money transmitting business and conducting money transmission without a D.C. license. According to the indictment, Harmon…

Right. For some reason I misread your previous comment as miners, not mixers. But now I don't fully understand why you brought mixers up, mining is a different activity.

I dunno, from the list of charges, you can see that there is no law against mixing per se.

It could just as well have been a prosecution of hawala or something.

The laws seem to be pretty general.

Re: MakerDAO gets stress tested as ETH price plummets

#94

Post by vinniejames »

ppf wrote: post #78
vinniejames wrote: post #68

Earlier quoted context omitted.

There was nothing unexpected here. Users traded their eth X days ago for dai, with the full intention of adjusting their liquidity characteristics What happened here simply precluded the possibility of the reverse trade when the loan became under collateralized, this was not unclear to anyone involved

Traded? You mean loaned. That was always the wording that was used to promote DAI, whatever the underlying transaction might be.

Users didft "loan" their lost ETH, they traded the ETH in as collateral and took out a loan in DAI.

This collateral trade was made with full awareness that if the loan became under collateralized the ETH would be liquidated and sold at auction

Re: MakerDAO gets stress tested as ETH price plummets

#95

Post by marcinjachymiak »

nootropicat wrote: post #2

Given that this was a black swan event and the actual damage is minimal, DeFi has proven to be extremely durable.

If it can't handle the extremes, it's not durable. This is such a bullshit attitude. Financial systems need to work in the extremes. Period.
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