MakerDAO is turning out to be the killer Dapp of 2019. It is spearheading a slew of DeFi applications I can see being built out. I'm not a finance guy but I can imagine that decentralized loans which do away with loan officers, many days of underwriting are all down away with, is just the tip of the decentralized finance applications to come.
Over-collateralized loans like CDPs will always be easier to issue than a (more common) under-collateralized loan. Unfortunately, buying $10,000 worth of assets to get a $5,000 loan simply isn't practical for most people.
I'm as excited about MakerDao as anyone, but we're still a fair ways out from having a good decentralized credit system.
I absolutely agree, my point is simply that for the average user the "loan" aspect of it isn't really the same as getting ~~financing to buy a car~~ a line of credit, where you only collateral is your credit rating.
Yes, but credit cards are (1) only available in certain developed nations and (2) have an interest rate that's 15%-20% or more. Creditors also have collections agencies and Courts that can attach your bank account that help collect bad debts. All around, there's a lot that goes into the unsecured credit market beyond your credit rating. That said, I don't think DeFi has any interest in replacing that or competing.
Weird that this was just published, I was trying to calculate the growth in circulation of dai this morning and was going to do a brief write up but decided to hold off until I had time to go through it a little more. Now I don’t have to! Thanks!
Some things to add:
Over the past year Dai circulation has increased by 179,340 per day on average and over the last month that has increased to 207,502 per day after having dropped significantly as ETH tanked further. I assume this could mean people are a little more confident ETH has bottomed, or it could also be that the Dai ecosystem is just becoming more robust and there are more reasons to hold Dai.
Someone should track USDT growth too, since they are equally centralized.
Is somebody making a decentralized DAI? Would have to avoid centralized ethereum premine chain and actually incentivize oracles to be honest and make their selection actually decentralized like Dan Larimer did in 2014.
It's quite amazing if anybody thinks a single central party allocating authority over trusted oracle selection is in any way decentralized.
Bitshares was more than 60% PoW and thus widely and permissionlessly distributed to actually have the voting power and control distributed.
Dan designed oracles to be paid and thus have something at stake when they are fired.
Maker failed at both, but it makes sense since nothing in history of technology is more centralized than Ethereum, meaning any developers building on it have to be incompetent and/or unethical.
Dan Larimer has done more in 2014 for oracles, proof of stake, market pegged coins than all the scammers in Ethereum have done in their entire lives combined. Not 1 intelligent person works on Maker or Ethereum or Bitconnect for exact same reasons.
Yeah, I was there at Protoshares launch and I still remember the private GPU miner (when official claims kept insisting that the algo was GPU resistant, even long after it became evident that it was not). Anyway, those incentives that you mention have empirically shown to be ineffective: BitUSD trades at 70c and with a minimal marketcap. I agree with you that DAI incentives are likely flawed too, but that should not be used to justify Bitshare fanboyism.
Anyway, FWIW, Dan moved on to scammier proposals, first Steem and finally EOS.
there are countless bitAssets and bitUSD is a minor one.
bitCNY has always been the dominant one https://coinmarketcap.com/currencies/bitcny/ with peak 80m usd worth issued, more than dai ever, stable for 4 years b/c didn't black swan yet despite bts falling 96%+.
Combined market cap of all bit pegged assets was over $100m.
More than 40% of bts market cap was locked in CDPs but as market cap fell from peak, you get black swans on less liquid assets. Maker doesn't really understand difference yet as they only have one market pegged asset.
> those incentives that you mention have empirically shown to be ineffective
they are exact same incentives as DAI uses for peg for traders
The difference is maker has no incentives for oracles and they are selected by fully and completely centralized trusted permissioned process in Maker (privately deciding distribution of tokens, similar to ICOs).
I think bitshares had tons of issues, but not wrt oracles, and might be in fact the only well designed oracle system in history of crypto.
I also agree that steem and eos are scammier as they moved away from trustless distributions of stake via pow.
Real world use? https://twitter.com/BTS_uncovered/status/1060558236791783424
So you cherry pick the one asset that lingers with more ore less keeping the peg. I am highly sceptical: bitusd or bitcny they have same order of magnitude of market cap, and bitcny has no additional mechanisms; I do not see what prevents it from the same fate. Expectation that Choyna will magically come save the day? What year do you think this is, 2013?
Name 1 thing incorrect.
Facts don't change over time. Ethereum and Maker centralization is absolute, factual, and perfect.
It's actually very common for fraudulent projects like centralized Ethereum or centralized Maker to rely on censorship and distracting ad hominem's like calling others "trolls" when faced with unwanted factual data, as they have no technical foundation to stand on and thus they rely entirely on marketing and deception as basic scientific analysis is their enemy.
Ethereum is not called "chain of liars and thieves" for years because their community has any ethics of technical knowledge. Quite the opposite.
I suggest reading a book to learn how computers and block chains work and how centrally allocating control via premines is not decentralized. Ask a real developer (i.e. not ethereum/onecoin/bitconnect related developer) to explain it to you. It might require some knowledge of basic math like fractions that is likely too hard for most eth developers, but others like your parents can help you with those.