Does anyone know an unfreezable stablecoin that is the least at risk of becomming another TerraLuna? I love Monero but its too volatile to keep 100% of my life savings in an unfreezable stablecoin is CRUCIAL. This is such horrible news. Fuck Rune Christiansen for this shit!!
It really is a shame what’s happening with dai, isn’t it. They’re trying to cut out the decentralized thing from MakerDAO without alienating the community by creating another thing with the decentralized characteristics that they will design to fail. It’s such a terrible thing happening.
Thankfully, the makerDAO multicollateral contracts are available, anyone can launch a clone of DAI that functions as is. And they can even prevent things like USDC collateral (the only time they’ve ever broken peg was due to USDC losing it’s peg, DAI is very well designed and IMO can handle decentralized collateral volatility) and keep it strictly ETH or whatever. Also, am interesting thing, the oracle can be trivially modified to provide a price of another asset, so you can synthetically create gold backed stables that hold no real gold if you like, or even more interesting, you can peg to things even more stable than gold and that track inflation, like salt, or peg to non asset measures like CPI if you like. You just have to remember that this is potentially manipulatable by participants in those measures, just like the value of DAI is subject to Fed policy. Personally, I’d rather have my stable pegged to a commodity like salt than to a fiat currency.
If you like the idea of gold, there’s PAXG, I don’t know if it’s freezable, I would be surprised if it isn’t, but I highly doubt these other stables are going to start freezing out small fish just to demand KYC.
Anyway, this is all off topic for Monero but it’s still something I figured is worth discussing. On a Monero related topic, o wonder what the serai developers are going to do in response to this, their entire goal is a dex that supports DAI, ETH, BTC and XMR from launch as basic functionality.
Edit: apparently, there’s liquity and lusd, which is governance free, unfreezable, pegged to USD via ETH collateral (unlike Luna which existed to collateralize TUSD, an obvious fail to anyone who even marginally understands this stuff) and has what I think is a pretty solid peg mechanism from my perusal of documentation. I’ll have to look at details and think on it, my main concerns are that the collateralization ratio is hard coded into the contracts at 110% (no governance, remember) and that the base fee for creating LUSD is hard coded to stay between 0.5% and 5%, which may not be sufficient in wild swings in the value of ETH. The contracts are not upgradeable, again, no governance. That’s good but also scary. All in all, if I were going to park some capital in a USD pegged stable some time over the next year or two, I wouldn’t use it, I want to see how it performs in a bear first, and DAI is going to work as is for the next couple of years anyway so it works fine for now.
Tether also has gold backed XAUt token. I believe with the big narrative of RWA we will see more stables.
as someone who has studied both, I would recommend LUSD (v1) over dai. LUSD was launched 3 years ago, so it stood the bear test. the minimum collateralization ratio of 110% applies to individual troves as long as the total system collateralization is over 150%. once that’s breached, troves are required to have 150% minimum. the Achilles heel is the oracle. if Chainlink pulls the rug, which they can, it’s over (sadly, Tellor is used by Liquity in a way that it can’t protect against a Chainlink apocalypse). Maker is somewhat better in this because they use Chronicle, which is ran by more trustworthy people, but I’m almost sure they haven’t made their contracts immutable. if that is the case, then the same attack vector exists there.
as you’ll see, neither of these are the solution we’re looking for, and they both run on the no-privacy, hypercomplex, captured, constantly changing Ethereum blockchain, so… fuck.
but dai for a long time has not been what the market thinks it is. avoid it.
Interesting, I had learned about the recovery mode of Liquity and knew about the 150% system wide collateralization threshold, also the redemption mechanism to liquidate troves even if they’re above the threshold as a stabilizing mechanism. It looks like a good set of mechanisms that is capable of maintaining a peg. I didn’t know it had been running for 3 years, I’ll have a look at price history to see if the peg has ever broken and see what happens to cause it to recover. I was under the impression that the oracle signal was on chain, from liquidity pools against other stables. All in all, in my mind, ability to hold a peg is less important than the feedback loops being in place to allow it to recover on it’s own. It looks like liquity has those, unless im missing a glaring hole which I guess I’ll find out in due time.
I knew Maker was not immutable yet, and I was eagerly awaiting the promised day when that would be rectified, this news of splitting maker out into a compliant, custodian asset collateralized system and a “pure decentralized” one tells me that basically that is never going to happen. I’ll observe puredai. I have no interest in the other one.
All this stuff being on Ethereum is a bit of a minus for me too at this point. It works, I’m alright with it the way I’m alright with Bitcoin, but it isn’t ideal.
see what happens to cause it to recover.
this should set you up as a starter: https://www.liquity.org/blog/on-price-stability-of-liquity
I was under the impression that the oracle signal was on chain, from liquidity pools against other stables
that would mean that if even one of those stables dies, LUSD would destabilize too (and there would be no possibility of intervention, since that protocol is completely ossified). that’s worse overall.
Maker was not immutable yet
I was talking about Chronicle, the oracle protocol that spun off from Maker.
basically that is never going to happen.
look at Maker’s history, what’s been promised, and what’s been delivered. don’t take it for granted that puredai will ever happen.
what’s wrong with PureDAI? they wont allow other stables to be collateral, which is really good. Or will it also have a freeze authority like the other stable? idk that much so you need to provide some context bro.
anyway there is one on Solana that functions very similar to DAI, it’s called PAI (Parrot). Also RAI o. ETH but it’s not collateral based
https://forum.makerdao.com/t/reconciling-the-two-opposing-paths-for-decentralized-stablecoins/24280
It will become the next Terra Luna. They should make it new projects but they want MKR tied to its governance. Its all a cash grab and so sad. Thank you for the alternatives.
I went through it, thanks
How exactly will this be the next Terra Luna? Maybe you can explain to me. Sorry It’s been a while since I studied all that stuff and the crash happened.
But yeah, looks like they are essentially focusing all their attention on the new fed glowie coin, and pushing “PureDai” into a new DAO altogether, off to the sidelines. It will gain its peg in a fully automated form using decentralized collateral. Maybe that’s the Terra Luna part you meant. But if it’s overcollateralized then wont it be as strong as original DAI?
How sad. I agree with the last guy. This is sabatoge. Likely that the feds are pushing this in the background, pushing the Founder guy.
I think stablecoins will always have a centralized point of failure. Weather it is an algorithm, or having the coin backed by the actual asset.
I think the best stablecoins are backed by the asset 1 to 1 or a little more then 1 to 1. Most stablecoins that do this are token on smart chain contracts which have another vulnerability which is being a smart contract. Smart contracts could contain a vulnerability and if it does have a vulnerability, a new contract will need to be made and users will have to switch their old token to the new tokens. Also censorship is an issue. https://cryptonews.com/news/tether-takes-action-blacklists-validator-address-linked-25-million-mev-bot-drain-heres-what-happened.htm
And these stablecoins are not private. The only private stablecoin platform out there is Haven but Haven assets are not backed 1 to 1.
I hope there are plently of stablecoins issued on Zano in the future. Zano allows you to create an asset without creating a smart contract. All assets on Zano are private. I would like to see Tether, USDC and other issue stablecoins on Zano. Trusting the issuers on backing the stablecoin and trusting the issuer to secure their private keys to prevent hackers from inflating the asset will be the only vulnerabilities, but you will have privacy and a censorship resistant stablecoin!
What’s happening to DAI? I’m out of the loop.
Don’t meddle with “stable-coins”.
They are pointless since they:
- Do not replace fiat
- Are not stable since inflation on fiat
- Are more risky then fiat
If you want a “stable-coin”,
just use fiat…
Only crypto you should still care about these days is Monero.
Great idea! Any idea on how I would avoid getting brutally raped by the taxman by doing that? See, with DAI I could just convert it over and boom. That was it. My rent and car payment are locked in now for how ever many months worth I need it to be stabilized for. But with what you’re suggesting why would I even use crypto at all just screw all the privacy and tax freeness of it all and convert it straight to cash with a CEX every time you want to stable up! That’s terrible advice. I agree that Monero is so important but you’re out of touch and mistaken if you think it can survive on its own. Haveno and Serai will be the only options left to get it soon other than mining or face to face p2p trading which isn’t feasible for everyone. If we don’t do something now that can introduce and immutable form of stability then we may end up losing the fight eventually.
