How do they prevent the system from being under collateralized and perform liquidations? How is the peg maintained? Do they have a way to unwind the system if it becomes under collateralized? It's a very interesting project, bit I feel like there are major things that have not been explained yet
This is a misunderstanding of the credit system. It is not hard-pegged to any value, but should in theory be stable-ish. If it scales to a billion or two, it will become more stable as liquidity increases and psychological value from thousands of actors choose to make it stable.
Lastly there don't really need to be liquidations as you just get a sort of impermanent loss on your collateral as the price between you collateral and the virtual token move in the AMM pool. It's like a soft and/or continuous-liquidation (from my understanding).
> but should in theory be stable-ish
This is the crucial point. If it's volatility for X% is unacceptable then Maker still has a significant advantage and this reduced volatility could serve as maker's moat.
No... you just can't exit with as much as you started with... The article states you will have sUSD+StableCredit if the price moves against you. I am not clear yet if they rely on the chainlink price feed or the AMM to naturally arbitrage to figure that out.
It has yet to be battle tested. Innovation is great but they are different concepts, one has risk analysis, oracle implementations, smart contracts domain teams and is looking into RWA to scale up and bring solutions to real world problems and the other one leaves that up to code and seems to be focused on absorbing any crypto assets regardless of the risk based upon incentives.
One you have direct access to your locked collateral while in the other one you may likely have but you may not (as per DC comments)
One is integrated in dex and cex and the other one seems to be traded within the system.
I haven’t analyzed it deeply though, we will see how it integrates to the defi ecosystem, anyhow yearn & andre are doing an incredible job which lifts all the defi ecosystem, liquidity is welcome.
I have been a long time mkr holder. It seems like these other protocols are eating our lunch. Stable credit will make YFI scale infinitely so it’s no longer capital capped. It’s in the works that it will be able to deploy anything on uniswap as collateral.
MKR is starting to seem like maybe not the best long term bet here. Anything that I’m missing on our roadmap that would suggest otherwise. I just don’t see how YFI and the stable credit doesn’t turn out to be an absolute monster swallowing these other protocols whole.
Link below to the Bankless description with Andre himself.
I sold all my MKR (at my peak I had over 2000 MKR) and I very sparingly hold Dai nowadays.
Rune and the Foundation lost the plot years ago... I didn't want it to go down like this, but the writing has been on the wall for a while, MakerDAO has no moat. They had first mover and have squandered it. I used to recommend MKR as a buy, I now recommend people that hold it to sell.
Hi, have you seen the developments being performed within maker?
To name just a few:
- We are close to actually delivering real world value solutions
- Dai has 4x in 2020
- MCD has now 11 different collaterals
I welcome you to check out the forum, specially since you’ve been from the beginning it could give a valuable insight
I gave all my insights long ago and was ignored every single time. It's no longer worth my effort or time. I just occasionally see things from here in my reddit feed every now and then.
Stable Credit and YFI will move fast and *experiment*, something MakerDAO has never seemed to be capable of. MakerDAO is gonna get its lunch eaten and I never would have wished for that and still don't, but it's already lost.
It's so bad now, I don't even see a pivot it could even make to come back from the brink.
And I should add, MakerDAO is suffering from "brain drain" now. Which is to say, the people or opinions you needed to change Maker from the inside have left the Maker-nation and moved to other projects/dApps/Communities. What you are left with is people that all agree that you're on the right path, even as you walk into a maw of irrelevance.
We can agree to disagree, however if you change your mind drop by the forum, some interesting conversations are going on. Particularly I’m looking forward for real world assets & yield farming assets that can drive minting up while significant revenue is collected to expand the different domain teams
I need to stop by the mkr chat it’s been awhile. What are they doing with real world assets and yield farming? I would say this...crypto is a flavor of the month thing a lot of times. Just a few days ago Twitter was clamoring over the tri force of ETH MKR and YFI.
I do have concerns though that Maker is getting out paced and seems to be standing on the sideline.
Real world assets are getting traction from the community (check [signal request to determine if RWA should be considered a priority](https://forum.makerdao.com/t/signal-request-should-real-world-asset-collateral-onboarding-be-prioritised-in-the-short-term/4075)), there are already collateral applications from trade finance to royalties passing through real state (just two days ago there was an application for consignment inventory finance) it does not have the same mechanisms in order to onboard therefore the analysis is far deeper. There are biweekly collateral calls presented from different collateral applications, the next one involves real world assets, click [here](https://forum.makerdao.com/t/agenda-discussion-collateral-onboarding-call-8-wednesday-september-16-17-00-utc/4062)). As per yield tokens last week primoz did an extensive analysis [here](https://forum.makerdao.com/t/research-ctokens-as-collateral/3979) and you see the applications for collateral pending [here](https://forum.makerdao.com/t/collateral-status-index/2231).
ELI5 from this comment on r/makerdao
Copy-pasting the comment here:
Would love to open a discussion for MKR holders on Andre Cronje's new StableCredit protocol. It seems to be a direct competitor to CDP's and Maker's Dai.
More layman explanations:
[DC Investors explanation](https://www.reddit.com/r/ethfinance/comments/ipxtn2/daily_general_discussion_september_10_2020/g4qgqsu/?context=3&utm_source=reddit&utm_medium=usertext&utm_name=MakerDAO&utm_content=t1_g4ycbuy)
[Lisa Tan's explanation](https://twitter.com/lisajytan/status/1304584889237270528)
Just to add, it occurs to me that bootstrapping liquidity/scaling for this might be one of the first good reasons to mint a new limited supply of YFI. Given current prices emission could still be quite low to bring in a lot of new hype behind this product.
Minting more YFI probably isn’t going to happen. All of the early YIP proposals and suggestions related to this was shut down, and one of them was about minting 30K over the course of 10 years IIRC.
When we were at about $10K - the time I first bought in - There was also a suggestion that never really gained traction that we’d mint more if YFI exceeded BTC unit costs for 12 days. That didn’t happen either.
It could happen in the future, but it doesn’t seem likely anytime soon.
>All of the early YIP proposals and suggestions related to this was shut down
YIP-30 very nearly passed though. It wasnt until [Andrew Kang rallied against it](https://twitter.com/Rewkang/status/1289688600729096192?s=19) that the momentum really flipped (with just 3 hours remaining). It definitely had a fair bit of traction until that point.
You could be right and maybe the meme of 30k has gotten too strong to be broken by the community. But if the right stakeholders made a compelling argument for it again to build liquidity for this or other new products, I could definitely see happening. Maybe even soon given how fast the team moves. I think circumstance will matter more than timing.
Good points, but then again, late rallies are also a part of any democracy in action. That or evidence of whales rallying together if we're being honest.
Times change. One could argue it wasn't fully a Fair Launch because what about the next generation? Just because they weren't born, should we forget about them and take all the value for ourselves? Even BTC has a distribution schedule that mints BTC for future generations.
I wouldn't rule out such a change as a possibility. A YIP, with enough support, could change the supply amount in the near or distant future (should the project ultimately succeed).
One of the big criticisms of Maker DAO (and other decentralized stable coin designs) is that it can't scale. I'd be interested in seeing this model push that to the test, and one way we can drive liquidity to try and do that quickly is mint a small amount of YFI for LPs.
Just a thought--certainly might not be neccessary. But with other lending and stablecoin protocols providing incentives for liquidity I do also wonder why users would be interested in using this over other options. Maker's APR is very very low and Compound's is actually negative after COMP farming. How does this model compete with that at launch?
I honestly don't know .
My mental map is AMMs like uniswap need liquidity providers who can suffer impermanent losses where they withdraw a different ratio of pool tokens compared to what they deposited.
On the other hand Comp and Aave the liquidity providers deposit to a pool and get the same token back (just slightly more of it).
I think that this protocol will allow you to deposit anything (possibly white listed tokens with oracle's?) And borrow anything or mint the stable coins.
If deposits attract sufficient yield I don't think we will see a lack of liquidity.
After all the yETH vault attracted lots of liquidity when the "only thing" it did was automate protocols in place.
But I'll. Need to see what others make it the implemented code because I don't think I fully understand it yet.