Frankly speaking, DAI/SAI isn't even a stablecoin to start with. It is a lending coin, to be exact.
DAI/SAI as stablecoin, has extremely serious counterparty risk because there is very limited collateral to back the coin in the midst of persistent price volatility.
Thus the only viable way to maintain the peg is to make it a lending coin, charging variable interest rates accordingly from time to time. I don't understand why people still consider DAI/SAI as some stablecoin, which it clearly is not.
Owning or holding DAI/SAI as an investment is an extremely terrible approach. If ETH outperforms meaningfully for another cycle, both the ones that borrow and the ones that lend will underperform. And default may very likely happen for both sides.
The side that lend may charge way much higher interest rate to make up for the underperformance, while the side that borrow may just take the easy way out by defaulting since they have little to lose after all.
The only way to make DAI/SAI sustainable is to make sure ETH never outperforms. But then, we should ask ourselves honestly, why should we sacrifice a worthy and valuable network that is Ethereum in favor of a faulty lending coin?
How many tokenholders are there, that own $20M upwards in MKR?
All of those would have been able to execute a ‘governance attack’. It’s like you buy all the votes and then vote for what you want. Why would a16z do this? They bought MKR (presumably) because they believe MakerDAO will be huge. What would be their incentive to mess with their investment?
Well, yes, but think along a little further. For someone to buy $20M worth of MKR, how would they do that?
The market for MKR is very illiquid, so buying that much would make price explode and you’d be sure to spend a lot more than $20M. The price of MKR would probably double or triple if not more.
The price of ETH would suffer tremendously if MakerDAO would collapse AKA all funds were to be stolen. So that $340M worth would pretty soon be $170M, probably way less, since all DAI would be worth zero, so many DeFi would collapse too.
The only way an attacker could profit from this attack is have a huge short open prior to the attack.
Why would one of the biggest backers of Maker, with investment partners who worked at the dept of justice, organize a governance attack to steal collateral? Really, are you that divorced from reality to even entertain that?
This is concerning. The foundation's rebuttal gives me no relief. Honestly maker is in danger RIGHT NOW, and they are just hoping that the people with enough MKR to do this today just decide not to. Not a good look, and I would argue it's a systemic risk to ETH.
I think this is being a bit sensationalist - a DAO is at risk if a malicious actor gains a voting majority. That's sort of the whole point, that a DAO is always at risk of that so it must be incentivised as a collective or it will fail. A great 'case study' example of this is what is happening now with digixDAO and the upcoming running vote to dissolve it!
Did u see somebody made a smart contract to execute once it gets the necessary funds? This is a fucking nightmare in the making... https://etherscan.io/token/0x9f8f72aa9304c8b593d555f12ef6589cc3a579a2?a=0x69076e44a9c70a67d5b79d95795aba299083c275
Who cares? It's a pittance. One of if not the highest raising ICOs has for ***years*** sat on its pile of gold and produced pretty much fuck all utility. It's barely spent anything on Devs except the initial version, no marketing, no lobbying regulators, no common-goods investment back into the Ethereum community.
Basically they raised like 90MM (Or whatever it was) to do a job worth about $1-200K (if that). And... 5 years...
Did you read the article? The "attack" is just a potential governance vote that changes the system done by whales.
MakerDAO is a DAO, it works like an onchain company, of course the major token holders could potentially disrupt the system with their vote, the solution to this "potential problem" is just a higher delay between the vote and its effects.
It's like saying that Amazon could go bankrupt tomorrow if Jezz Bezos decided to use his power and his shares to do mad changes to the company.
Reading? Like beyond headlines and bots? It's like you think we're some community that invests money into new ideas requiring research and questioning. Just last week I YOLOed all my Bitcoin into Matic. No idea what it does, but everyone kept mentioning it. Now I've got stacks on stacks with mad gains! Have fun reading while we get rich!
Absolutely not, I mean, like, what would happen if Bezos decided tomorrow to offer all the assets of Amazon away for free while at the same time shipping a pack of cow shit to all his customers? That would be a problem for Amazon but he is the major stakeholder so he could theoretically do it.
Another thing: do you think a DAO should be limited by national laws? I personally don't but if you think so what laws should they respect? A proposal about removing everyone's ETHs would probably be illegal in most jurisdictions, should a DAO be limited by a jurisdiction? Should the single voters comply with their own laws? These are problems we should find an answer as soon as DAOs become popular.
I have no intention to waste my time with people making stupid examples while pretending not to understand, if you are seriously not understanding why your example is wrong then you have my compassion but you won't have my time either
I’m worried about Proof of Keys coming up. With a limited supply of bitcoin, many people will likely sell and then re-buy rather than move from coin exchanges to wallets and back.
What’s to stop bots/huge corporations from buying all that excess IMMEDIATELY.
Here's how to do the attack: [https://medium.com/@MicahZoltu/how-to-turn-20m-into-340m-in-15-seconds-48d161a42311?](https://medium.com/@MicahZoltu/how-to-turn-20m-into-340m-in-15-seconds-48d161a42311?)
These are very important points for any mkr or dai holder to grasp. There are significant systemic risks here.
Not enough to make me dump my dai and mkr, but enough to make me think hard about acquiring a lot more.
How is this the opposite, it's literally in the medium article
"Create an executive contract that is programmed to transfer all collateral from Maker to you.
Immediately (in the same transaction) vote on the contract.
Immediately (in the same transaction) activate the contract.
Ride off into the sunset with 340M USD worth of ETH (don’t bother going back for your MKR, it will be worthless after this)."
but now that I think about it, the ability to add new collateral types and fully control oracles is enough to take everything anyway, so whether he meant that or a more direct transfer is not that important.
Single collateral dai is much easier to secure in principle, as reasonable minimums and maximums can be hardcoded (ie. 100% collateral ratio minimum, 50% annual interest rate maximum) leaving only oracles as the main security risk.
The attack is possible because the system is “immutable”. If it was “mutable” like you originally said, then MakerDAO could just revert the vote and return all collateral after the “attacker” voted to give it all to himself.
That’s the point dude. You originally said this: “Wait, the dai system is really fully mutable to the point they can vote in confiscation if they want?“ but the attack only works because votes are ‘immutable’.
Editing to say this is a really silly debate and gonna leave it here