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DFIP 2112-A Bringing DUSD closer to $1 by allowing DFI for loan repayment & collateral #99
Comments
Love it!! |
thanks, Balthasar, let's do it! |
Why do we even need to peg to 1 dollar, why not create a new economy with the reserve currency being DUSD |
Thank you Balthasar for this pragmatic solution. It‘s very important for the mass adoption that at least 1 DUSD should be 1$ (+/- one cent). Stable has to be stable. As quick as possible. Let‘s go for it. |
what the mere announcement of these proposals does. unfortunately the surcharge of the dStocks increases. How and where can I vote for this proposal? |
Thanks for your proposal. |
I think this solution will just shift the problem to the other dToken: If DUSD value goes down and the value of the other dTokens stays at the same level, their prices will go up and the price difference to swap DFI to a dToken will be the same, like we saw over the past days where DUSD price went down a bit and dToken prices increased. It's only positive for the DFI-DUSD and I think therefore the risk of this solution exceeds its potential benefit. |
i don't quite understand why we need a short term proposal for the long term. Yes, DUSD is too expensive at this moment ( compared to the Fiat USD ), but with DUSD you have the better Profits like DFI. A week ago DEX and oralclae price differed by about 25%, today it is only 14%. And what I would like to add. But in the end, what is crucial for DeFiChain and the community is to determine exactly who will benefit from this change. This should all be evaluated |
Nice!
I assume the 1% penalty will get burned, right?
I think this idea would lead to a huge problem (at least if you think longterm)! |
you need a Masternode |
As some people including me and don camillo from the telegram group discussed Balthasars well thought proposal in the telegram group and private chats some questions occured
One concern in Balthasars proposal could not be wiped out.
A lot of people appreciate the dusd to be backed with a certain amount of collateral and a certain amount of dfi. This might be an emergency solution, but there is the inbuild risk in creating an unbacked stablecoin an improve the problem to the worse.
The first problem of negative interest would also be the creating of unbacked and therefore infinite dusd, if the loan vanishes via negative interest. Obviously we don't like that idea.
We would like the idea that there might be an selfadjusting system that could rise and lower the attraction of buying or minting dusd via dfi like a pendulum oscillating dusd around 1$ creating a homoeostatic system. A homoeostatic system needs feedback loops and indicators. The indicator would be the price of the dusd beeing higher than 1 (+Loop) or lower than 1 (-Loop) a)The Minus-Loop is clear: Cost of interest is payed by the one who owns the vault/takes the loan. The interest goes to the system to the dusd pool lowering the buying fees to make it more attractive to buy. b) as U-Zyn proposed a negative interest should initiate the feedback loop to lower the dusd price when it is plus 1. The Plus-Loop. Problem of unbacked dusd by melting loan could be used as following: Cost of interest is earned by the one who owns the vault/takes the loan. The interest comes from the system/the selling fees, lowering the price of the dusd. We'd like you to share your comments and discuss about establishing a kind of these feedback loops so that the chain can keep the homoeostasts on its own. As we are no technicians we are not aware of the coding issues. And maybe we need further research on the system balancing itself and how to modulate fluctuations and prevent escalation. Maybe on the beginning the masternodes vote on these fees to collect data and a research project could be done supported by the community.
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Voting is opening from Friday, 17 December 2021 23:59:59 UTC. Please refer to #100 for other key dates. |
Did you guys see what the proposal already caused? dToken are/would be the next asset having 30%+ missmatch. It represents the real value: risk and opportunity. It's not all about marketing... |
As we already can see: To lower the dUSD will lead to an increase of value in the other dToken. There needs to be a valve and it doesn't seem to be the case with this proposal. An open-book unbacked USD-token maybe won't be accepted by exchanges. It would also be beneficial if you can then buy dToken directly with dUsdc / t, i.e. also add these pools. Of course, with maybe 20% DFI as a third party to be able to enter the Pool for LM, a kind of "gold standard", the lubricating oil in the engine. I think that finance professionals who can think in terms of complex equilibrium systems have to work here. |
Awesome! I agree that it's definitely not the ideal solution. But from a marketing perspective, this is more than overdue. In my opinion, if we lose too much momentum, the implications could be much worse than waiting any longer. I mean, how do you want to promote something by saying: "Hey, this is so cool, but... be aware that you lose ~30% of your money instantly before you can earn any money. Enjoy!" Let's rather do small & fast steps instead of playing "Mr. perfect" (which doesn't exist anyway). |
I think if we trial it with DUSD first, and it all plays out well, we can open up paying other dToken loans with DFI in a blink of an eye - solving the dToken premium as well! Ayyyyye Sir, let’s go boys!!! |
signmessage 8K252f95EJCFn7Hv773vHaUwSMxrptm4JS dfip-2112-a-yes |
signmessage 8cwPwDzdvKEbuJfwBT3duEtyoRKc1i9zKb dfip-2112-a-yes |
Explaining to anyone new to the chain that they pay a premium for a stable coin isn't going to work. It's a pity it wasn't predicted. This needs correcting, we don't want to rush, but we don't have months. The proposals have been discussed in length and the whole community has had a chance to openly discuss their concerns. Governance can and should be improved in future - but my view on this change is we do adopt it (but let's document any risks and have a plan if there are unintended consequences). Then move forward and build on! One chain, one community! |
signmessage 8QCBuwyuQFTMPxgZAaK6kQaVnnpye5nc4C dfip-2112-a-yes |
"Wisely, and slow. They stumble that run fast.” William Shakespeare Why introduce a not perfect solution where everyone have concerns. I don't like to be the one pointing out the dangers like a grandpa but I really feel the risks here are under estimated by far. Yes we are in momentum, maybe maybe not. Something unexpected happened with the Fort Canning update, what is preventing it this time? Are we really in a time critical phase? I highly doubt that and here is why: (Worse) Case scenarios:
DFI price goes to 5$ (best case)
DFI price goes back to 2,50$ (short term worse case)
DFI price goes to 1$ You see there is not much to win but much more to lose. Let us give more time. We are not small anymore there is a lot of money on the line for everyone of us... |
@DTenere i do not see as much of a problem with dToken trading at a premium, after all they are not the real stock, but a USD stable coin should remain stable and pegged in my humble opinion. |
signmessage 8TQ91Xpu16CXajzbju37tMAvEvGFnw8ryk dfip-2112-a-no |
What happens if DUSD Price drops under 0.99 because so much people wants to do arbitrag in the same time? Nobody want to buy DUSD for a negative rate any more and a vicious circle begins.... |
defi-cli signmessage 8ZAP8vH11pTT47i58GL22GZeW1bX6DCccD "dfip-1-yes" |
$ defi-cli signmessage 8eKVok98Qod4nCruNZL8ZLTZMG9LRm3V7t dfip-2112-a-yes |
I vote yes to the proposal, please make it happen asap for the ultimate good of the project. |
You need a masternode to sign your vote. |
Hi, John
How do I get masternode to do that? I'm a newbie to GitHub and voting here.
Best regards.
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From: John ***@***.***>
Sent: Monday, December 20, 2021 3:05:17 PM
To: DeFiCh/dfips ***@***.***>
Cc: Jonthreesixteen ***@***.***>; Manual ***@***.***>
Subject: Re: [DeFiCh/dfips] DFIP 2112-A Bringing DUSD closer to $1 by allowing DFI for loan repayment & collateral (Issue #99)
I vote yes to the proposal, please make it happen asap for the ultimate good of the project.
You need a masternode to sign your vote.
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All is explained here: https://github.com/DeFiCh/dfips If you have further questions, please ask on reddit or TG, this is not the best place for support, but we'd be more than happy to help you on either of these communities. |
$ defi-cli signmessage 8YBcHsAMiQkVSdmRutroDJYzhmk7XfPrme "dfip-2112-a-yes" |
defi-cli signmessage 8Wk9Yfeyd7C4Nh6FTs6tmGobhBmPzmhmFM "dfip-2112-a-yes" |
$ defi-cli signmessage 8JBngbGW3R3m5GXzRCp45wPJLP8KWLDfXP "dfip-2112-a-yes" |
signmessage 8XjGQuumUBGyevsG8Jn4yZQ6QBpkA4ukgM dfip-2112-a-yes |
Summary of votes from eligible https://cakedefi.com users after survey:
130 yes
12 no
5 neutral
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signmessage 8daGYPTDTzMRtUx61uWRjg7p9GECMjuip8 "dfip-2112-a-yes" |
signmessage 8J9ChjB3QuUGqTUJ3tdHiix2pAoyknYx2g "dfip-2112-a-no" |
signmessage 8N5iyTHbJNQc1nTfF74khJ9rndj6kG9FzN "dfip-2112-a-no" signmessage 8Ht3oDDj2uHeoae3mKALM6kVmsuJaj3SSm "dfip-2112-a-no" signmessage 8YsdyhGMoJfjfujfQox1D2S8d4JTzGQivj "dfip-2112-a-no" |
mnstate_validate.log |
What about being able to pay back all loans with dfi? Why should this be limited to the Dusd loans? This would align all pool ratios an the end customer would be able to take part without a loss. |
Uhh, that was close. This was a real "emergency" that justified an emergency update. At least the whole thing was well thought through, wasn't it? And who cares about the doubts some people had (like just shifting the premium to dStocks by printing un-backed DUSD)? "Whatever it takes!" |
this has went through a majority vote, stop whining about it in nearly every topic, i dont see you giving any positive suggestion that works permanently. |
@arah1 It is not that easy. There should have been alternatives for the voting and not just 1 possible solution. It was too easy to push and support this change not giving any other alternative the way to the fast track - I do not understand the motivation from the Defichain-side - maybe there is some pressure from the Cake-side? |
Thanks, good info. |
@KunoWA Well I understand now that this was a real emergency as Julian promoted shorting DUSD which only made sense in case you'd manipulate DUSD artificially afterwards. Imagine he would not have pushed this accordingly (as an emergency): People who followed his advice (to "arbitrage" DUSD) would have been mad at him (and he most probably even might have been sued in Singapore or elsewhere for knowingly giving more than questionable investment advice...). He needed to find a fast solution and needed to push it even faster. So now it seems that he has solved his legal risk issue, thus for now there is no need for any further emergency update. The only way to not accept that Julian can decide whether or not an issue is an emergency would be chain-split into CeFi-Chain and DeFi-Chain after the hard fork, however this seems not very realistic as there are very few master-nodes that are not operated by Cake-CeFi. |
Emergency DFIP bringing dUSD to $1
Overview
Requestor: @BalthasarBecker
Proposal fee: 01db41727f2092148d328b946a3ca0c4eb8faf82d393488ab65466eb81c26976
After a successful launch of the Fort Canning, hard fork incentives for dToken liquidity providers went live on the 6th of December. Every true DeFiChain hodler started earning sweet rewards via minting or buying dTokens providing them as liquidity for the DEXs. Unfortunately, with the demand of dTokens exceeding supply all dTokens trade at a premium ever since. Taking into account that we - the DeFiChain community - rely on accurate prices, especially regarding the dUSD price, I herewith propose the following solution to guarantee the dUSD USD peg. Furthermore, I advocate for a fast and efficient solution, ensuring we can fully focus on getting more people to participate in the amazing features DeFiChain offers.
The proposed idea is a composition out of multiple ideas that were thoroughly discussed, edited and further improved by several community members therefor representing a true community effort:
Every dUSD loan should be repayable with DFI (at oracle price + 1% penalty).
dUSD can be used as collateral at a fixed rate of 0.99 USD for every loan, providing additional utility for dUSD
The proposal is straight forward and easy to implement, but not perfect; it will directly arbitrage the dUSD premium, but many concerns of the community, including myself have been raised whether this proposal will devalue dUSD causing its price to fall below $1. As this risk still persists - there is no free lunch and solving the dUSD premium will always come at a cost - I would like to bring forward a couple of reasons why, at least on the short run, chances are rather low that dUSD will end up trading at a discount causing a default on the USD peg. First, currently we face more demand than supply causing the dUSD premium, hence buying pressure will continuously hold up dUSD prices until liquidity mining incentives reach unattractive levels. Moreover, once buying pressure fades and dUSD starts trading at a discount, people with open dUSD loans will buy back dUSD at a discount to close their loan. Currently, we have 70,000,000 dUSD minted, hence a fairly high buffer to mediate curtain price drops.
Last but not least, I highly want to stress the point that this is a short term solution arising from the need of solving the problem fast and efficiently, and I strongly advocate for several long term changes providing additional support for the dUSD price:
Implementation of a DEX fee for every transaction of about 0,05% for both the taker and maker, resulting in a total of 0.1% burn fee, which reduces any dToken over time
Including additional sources for collateral such as liquidity mining tokens such as BTC-DFI or others to further incentivize minting of dTokens
Introducing decentralized futures (like the road map suggests) to stabilize prices.
Finally, let me say again, that this is not a perfect solution without any risks or any cost. But, as we have all agreed during two Twitter Spaces allowing anyone to voice their opinion and hearing out other proposals, we are all aware that we need a working solution with minimal risk that can be implemented in a fast and efficient way.
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