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16185207 No.16185207 [Reply] [Original]

Recap: Maker produces a synthetic stable asset (Dai) by backing it with an unstable asset (Ether). It does this by guaranteeing every Dai is backed by at least one dollar of Ether at all times. You probably already knew that. What if we could do that in reverse? Can we create a synthetic volatile asset backed by a stable asset? Consider the following:

Put down 1000 DAI collateral and get 5 synthetic APPL shares (SAPPL). Why would anyone take SAPPL as the real thing? The same reason anyone takes DAI - because it is always backed by at least one dollar of collateral. SAPPL is always backed by at least 1 APPL worth of DAI.

In a regular Maker debt position liquidation occurs when the price of the collateral falls. But the collateral in this case is DAI which is stable. The ratio can only drop if SAPPL increases in value. The person who loaned himself SAPPL is then betting against SAPPL. He sells SAPPL for more DAI and hopes the price falls so he can buy more later, paying back his loan and pocketing the difference. But if the price rises and his collateralization ratio falls, his collateral (Dai) will be liquidated for SAPPL.

Do you get what that means? ANYONE can make a derivative for ANYTHING. And if enough people loan out SAPPL - it will become a substitute for the real thing.

Holy shit.

>> No.16185259

>>16185207
Its coming fren. In the next big upgrade, existing Dai will be renamed to Sai (Single Collateral), the new Dai will be "multi-collateral". Its going to be a wild world.....

>> No.16185260

Go look at UMA Protocol or Synthetix and stop being dumb

>> No.16185343

uma project seems like it's doing something like this on ethereum

>> No.16185353

>>16185260
>>16185343
sorry....MKR = first mover advantage.

>> No.16185398

>>16185260
>Synthetix
Imagine is DAI were backed by MKR. Lmao.

>> No.16185405

>>16185353
Maker makes no sense and has a shit brand. RSR will destroy it.

>> No.16185431
File: 48 KB, 800x729, brainlet.png [View same] [iqdb] [saucenao] [google]
16185431

>>16185405

>> No.16186019

>>16185405
>MKR has shit brand
it was literally one of the first successful etherum contracts, launched in 2015. It has tons of first move advantage and Dai is pretty much already everywhere.
Just wait until multi-collat comes in a few weeks...its going to be brutal for you