/biz/ - Business & Finance

>>16213587
>insane APR that probably have insane risks
its unironically the high APR that leads me to believe it will work long term. Do you know historical interest rates (biblical times) was around 20-25%.
Its only modern fiat where weve seen this fall to 0 or negative?
further, you do realize that all these loans are already "paid off" because of the collateral put forward...the only risk is to the borrower, no systemic risk.

>>16213587
yeah, but its gonna pump before it crashes, so you know what to do.Do you hate money bro? why are you even on biz then?

>>16213624
What happens when tons of finance products built upon tons of finance products built upon tons of finance products start falling like jenga tower if the base level fucks up? Everyone using any part of this stack and having their money stored in some wrapped bullshit wrapped in more wrapped bullshit based on dai/eth whatever is going to be fucked.

>>16213636
How do you make an educated guess when this bullshit collapses if the risks are nebulous and improperly communicated or even researched? How do you earn enough with your portfolio and exit before something dumb happens if it can happen at any moment. If the risks are too high and you lack the information to assess whether its worth the risk you're basically gambling every day. If you're too dumb to tell what has more risk, this babel tower or roulette might as well spin the wheel and don't bother with any research bro.

>>16213587
>Maker
Take the Reserve pill and your worries are over

>>16213637
Youre seriously worried about the price of ether collapses so fucking fast that people can't get their funds returned as contracts liquidate before losing all its value? Maker has governance in place to do everything in its power to prevent that, from 150% collateral requirements, ceilings on the amount of DAI that can exist to assess the health of ETH, etc. Just relax and earn your APR. Defi only has something like 2% of the total supply locked and is in no way comparable to the too big to fail bullshit banks you seem to tout.

>>16213587
FRM will be the Raiblocks style gainer of summer 2020. Buy Ferrum. Trap or not, sell toward the top of the Defi bubble.

>>16213687
>Maker has governance
>and is in no way comparable to the too big to fail bullshit banks you seem to tout.
Bruh

>>16213711
Nothing wrong with setting rules and boundaries for the protocol works and having a group that can change the rules for risk management. That has nothing to do with how the underlying protocol functions automatically via smart contracts and maintains all the core principles of blockchain. 150% collateralized vs fractional reserve bullshit. Fuck off.

>>16213637
well youre building a tautology. your premise is: "what happens if the price of crypto collapses instantly"....then your conclusion is "that will cause things to collapse?" Your argument is constructed so the only answer is "yes" because you've defined the collapse as part of the premise.

Anyway dude, high APR encourages short term loans as much as possible. Its fucking modern fiat 0% loans that encourage paying on the never never causing insane over leverage.

>>16213737
>>16213736
I like how nobody touched the Price-Feed providers and what happens at base layer. I'm not talking about price of crypto collapsing and ruining DAI which obviously is a low probability scenario. Leave ETH alone. I'm talking what happens when the insider bros fuck something up and the whole stack built upon some obscure group that only 2 people on Earth have seemingly have any idea about collapses. What's their bus factor? Your hostility and instant projection that I'm some kind of bank shill only cements my fears that I should stick to holding my keys and never lock/wrap my coins in any defi product.

>>16213781
>Your hostility and instant projection
>*becomes hostile and starts projecting*

>>16213794
What happens when maker truth providers that only 2 guys on the planet know who they are fuck up?

>>16213781
I don't know I mean on the maker website they say that the list of white listed price feed addresses used in their Oracle is decided by governance voting, which is anyone that owns MKR. How can the list be a secret if it's a voting item? This part of how Maker woks I'm not very familiar because you have to be a very special kind of tinfoiler to think the price feed is being manipulated. Im all about trustless but I mean common. I never read every single line of code that comprises ETH before buying did you? You have implicit trust in some things.

>>16213852
>How can the list be a secret if it's a voting item?
According to their faq it is so...
Also again, literally from their faq
>What's the process for becoming a feed provider?
>Currently, there is no formal way to become a feed-provider. When Maker started setting up the feeds, there were people inside the Maker Foundation who volunteered to be providers. Eventually, more people were added; some from the community, some from other projects. The identities have been kept obscure.
I just don't like this. This is too much of a black box for me to handle. If you like this, fair enough.

>>16213781
>I'm talking what happens when the insider bros fuck something up and the whole stack built upon some obscure group that only 2 people on Earth have seemingly have any idea about collapses.
As if this hasn't happened time and time again to the actual economy. The way I see it here, having only 2 people reduces the points of failure.

>>16213841
their project will collapse horribly and be a failure? a better version will arrive which fixes the problems? the cycle of death and rebirth will continue?

look fundamentally defi projects are going to be used for people to make bets...fundamentally its no different than a futures products (ppl either betting price of eth will fall, so get dai now at todays prices....or reverse, get dai today and pay off loan at discount tomorrow). Because of this, risk is already accepted and taken on.

>>16213781
the price feeds are definitely the weakest link of any DEFI product
I used to suggest getting DEXs more involved in the price index, but then the system will be dependent on DAI (potentially causing some kind of a feedback loop) and tethered centralized coins (what's even the point if you use those?)
in the end we probably can't secure a trustless representation of something that happens outside of the blockchain. (blue cube pnd need not apply)
the best we can get is a mix of solution that'll at least negate the damage if something does happen.

>It's a snowballing future disaster.
There's another pretty funny thing on MKR, lots of the big whale holders never really bothered to pay the usage fees. That's why there's a huge divide between how much MKR was burned, and how much will be burned soon™. I don't know how much of an issue that is but it's still pretty funny. You'd think there'd be like a timer or something where you gotta pay at least once a year (or it's auto sold from your collateral, similar to the liquidation mechanism)

I can't really shill DEFI since I too keep my money away from it (I use MKR for short duration occasionally though) for now solely because of this

>>16213972
>lots of the big whale holders never really bothered to pay the usage fees.
can you explain this? do you mean ppl are holding mkr as a speculative investment and not using it for loans....or do you mean something else?

>>16213993
I second that, I don't even understand MKR that much and the more I dig the more I realize I don't understand it and stuff that unnerves me just keeps piling on. And everyone else is just "yea bro, the elves and gnomes take care of it in the background, don't worry" which is not reassuring. 10% APR doesn't matter when in 2-3 years it turns out Santa Claus wasn't real and your whole stack vaporizes.

>>16213993
for every second you have a loan, you gotta pay MKR as a fee
but you only have to pay it when you return the loan
people simply hold their loans forever and don't pay the fees
I think it relates more to the value of the MKR token than the system being compromised

the end result is that MKR simply doesn't deflate, there's no buy pressure (since the biggest boys simply don't pay the fee, and don't need to buy/hold MKR), so one could argue it's the token itself is a shit investment.

>>16214023
>10% APR doesn't matter when in 2-3 years it turns out Santa Claus wasn't real and your whole stack vaporizes.
This kind of reassures me since MKR doesn't offer any APR
just an allegedly deflating useless "voting token". Like fuck off nobody votes.
That's why it's the only one I sometimes use. The rest can really fuck off, especially synthetix wtf are they doing.

>>16214054
got it. yes yes. I agree was a flaw in the system. especially since eth has remained so stable just let the loan go forever never pay it back..
from what I understand, the new system of auctions is meant to change that. In future, from what I know, in order to bid on excess dai reserves system you must have mkr which is burned.

what i don't get is if i hold mkr and you hold mkr and you bid on a excess dai.....does the dai only go to you? or is it distributed like a dividend to all mkr holders....the examples on github aren't that clear how the mechanisms really work.

>>16214182
desu I know nothing about the new platform, I just did my research earlier this year on what they had at the time

I'll do my research again after mkr the sequel been running for a bit and has some users, I don't think there's any incentive jumping on it early.

>>16214231
back in the pot lardass
your pnd shitcoin solves nothing

>>16214223
Speaking of mkr sequel, isn't everyone supposed to pay off their stability fee after the whole thing switches to multi collateral shitcoin pegged cdps? IIRC this isn't voluntary, it just happens in a few months if you don't do it manually. If you like to speculate on mkr then this is the best time maybe. If every whale has to shell out the tribute to governance gods there's your deflation bruh, haha.

>>16214250
interesting proposition
but I'll raise you a Priced In. And there's about 5MM$ unpaid in current MKR price. That's about today's volume, so it's not THAT much. only 1% of the supply?

>>16214247
... besides the base problem being discussed ITT
lul

>>16214313
https://www.youtube.com/watch?v=2l1RRjHW0ik
Watch this, see? This video has barely 200 views. Literally NOBODY CARES about governance, voting, nobody gives a fuck how this shit works as long as it works. This is gonna catch offguard so many dumbasses who don't pay attention to news and discussion and rely on shit just working as they were told. I don't think it's fully priced in but then again, it's your call.

Reserve Protocol is the future of DeFi. Prove me wrong.

>>16214223
here is what my research has taught me so far.
* existing dai will be called sai (single asset). they can convert to dai via a contract
* new dai holders will receive interest payments
auctions will balance network. 3 types:
* bid on excess dai in system. you spend mkr you get dai
* bid on undercollateralized loans. you bid dai, you get underlying asset collateral
* bid on 'debt' - loans that have fallen below not just collateralization threshold (ie. 150%), but are actually in debt (ie, <100%) are bid on. you bid in dai and receive mkr.

Now I have some more thoughts on how this works, but its speculative so dont want to pollute board with my misunderstandings...but happy if other anons jump in to discuss.

>>16214333
>checked.
good concept. good team...where is the product? at this point something that exist and works is better than promises and ver 1.0 bug filled releases...

>>16214317
Alright I'll bite
Chainlink, in its current form, is not trustless. As in you have to trust the oracle operators you're using. Or if you're using something like the ETH/USD "price aggregator" you have to trust in the person operating it and that they chose good oracle providers, since it's all manual.
How does it solve the problem? In the end of the day, you're still getting a price feed from 10 different addresses, without any assurance that they won't fuck you over. Don't you try mention collateral and various fictional bullshit features like that, if it's not on the mainnet I don't care.

>>16214361
>* bid on 'debt' - loans that have fallen below not just collateralization threshold (ie. 150%), but are actually in debt (ie, <100%) are bid on. you bid in dai and receive mkr.
I believe something like this was already a feature? The MKR token supply was always the final line if something really gets fucked.

>>16214413
>Alright I'll bite ...
Vastly superior to what's being used currently. Sufficiently robust to serve as fundamental for DeFi

>>16214423
Except that my point was that they're exactly identical, and you didn't refute, or at least deny, any of my points.

>>16214445
Identical in a sense that a crocodile and a tiger is identical because they are both animals.

So, completely incorrect.

>>16213624
>you do realize that all these loans are already "paid off" because of the collateral put forward
/thread

>>16214451
Except that you still haven't touched on any of my points, or at least presented how 1 system offers more security over the other.

>>16214460
Do you know what "aggregation" means?

>>16214473
yes, it's something the MKR price index already does.
Got anything else?

>>16214413
>on link
I will 100% admit upfront despite daily shilling, i know little about inner mechanics on link. However i dont see how oracles can work without reputation score. but how do you stop ppl from intentionally giving shit reputation score to intentionally fuck the system? intractable problem really that ultimately requires human judgement on who you are trusting.

>on mkr
I'm still learning mkr. I really wish a 140iq anon would show up to spoon. but yes, i think they've refined the process into these 3 distinct auction types, but the mkr aspect is still the counterbalance in the system.

I believe these 3 auctions flow into one another. For a hypothetical, lets assume a $100 dai loan has fallen into debt and is only collateralized to $90.

1. debt auction buys $10 debt, bringing back up to $100 ($10 mkr created)
2. position is liquidated by collateral auction. someone bids $X dai for $100 collateral
3. Dai flows into system which ultimately leads to surplus auction. Someone now bids $Y mkr on $X dai from above. (ie. bid $95 mkr on $99 dai).

The result of this is a net destruction of say $85 mkr (10 created, but 95 burned).

>>16214413
It's about insulating yourself from the unsolvable Oracle problem. Since the Oracle problem can't be solved, hedge against it by getting numerous results from different sources instead of a single point of failure. Sure, all these operators could collude to screw you or if money, but it's much more likely that a single party would lie than a group that doesn't know each other and is incentivized not to.

>>16214492
aggregation => multiple sources of data coalescing their data points into one.

Even at base, reputation is at least the same for nonlink oracles and link. Things will only improve with link as reputation is a work in progress item.

>>16214498
My point is that MKR using chainlink won't grant them any more or less security. At the current state of chainlink that is undeniable. I don't recall seeing anywhere that they're using chainlink, even though they're partners. Why's that I wonder.

The alleged future of chainlink sure looks great, but with what little they managed to achieve in 2 years does not fill me with confidence.

>>16214510
>averages.
but its a bit like the old Mark Twain joke: stick one foot in a pot boiling water, and the other in ice water and on average you'll be comfortable.

>>16214367
they have an app launched in Venezuela. Granted it's still a beta version for a limited amount of testers, but they already have 500+ downloads and 4 stars plus rating

Defi is a massive fucking scam

>>16214622
YOU GOT JUICED

>>16214622
i'll keep an eye on it, but markets are filled with better 2.0 products losing to incumbents. dai has significant penetration.

>>16214543
Aggregations doesn't equate to averages. That's just one form of possible aggregation

>>16214727
yea, but you need reputation to have weighted averages....

>>16214633
I don't disagree with that, but from what I see currently, Reserve is doing a shitton of grassroots work in countries of interest (Argentina, Brazil, Venezuela, Angola, etc.)

>>16214751
Weighted averages are yet just another. Cutting out outliers is yet another possibility.

Reputation doesn't concern itself with data sources last I remember. Just oracles providing data on-chain