Since DAI is currently being destroyed (lemmy.sdf.org)

submitted 5 months ago by BD89@lemmy.sdf.org to c/monero@monero.town

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Does anyone know an unfreezable stablecoin that is the least at risk of becomming another TerraLuna? I love Monero but its too volatile to keep 100% of my life savings in an unfreezable stablecoin is CRUCIAL. This is such horrible news. Fuck Rune Christiansen for this shit!!

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[-] chaser@monero.town 3 points 5 months ago* (last edited 5 months ago)

as someone who has studied both, I would recommend LUSD (v1) over dai. LUSD was launched 3 years ago, so it stood the bear test. the minimum collateralization ratio of 110% applies to individual troves as long as the total system collateralization is over 150%. once that's breached, troves are required to have 150% minimum. the Achilles heel is the oracle. if Chainlink pulls the rug, which they can, it's over (sadly, Tellor is used by Liquity in a way that it can't protect against a Chainlink apocalypse). Maker is somewhat better in this because they use Chronicle, which is ran by more trustworthy people, but I'm almost sure they haven't made their contracts immutable. if that is the case, then the same attack vector exists there.

as you'll see, neither of these are the solution we're looking for, and they both run on the no-privacy, hypercomplex, captured, constantly changing Ethereum blockchain, so... fuck.

but dai for a long time has not been what the market thinks it is. avoid it.

[-] mister_monster@monero.town 2 points 5 months ago* (last edited 5 months ago)

Interesting, I had learned about the recovery mode of Liquity and knew about the 150% system wide collateralization threshold, also the redemption mechanism to liquidate troves even if they're above the threshold as a stabilizing mechanism. It looks like a good set of mechanisms that is capable of maintaining a peg. I didn't know it had been running for 3 years, I'll have a look at price history to see if the peg has ever broken and see what happens to cause it to recover. I was under the impression that the oracle signal was on chain, from liquidity pools against other stables. All in all, in my mind, ability to hold a peg is less important than the feedback loops being in place to allow it to recover on it's own. It looks like liquity has those, unless im missing a glaring hole which I guess I'll find out in due time.

I knew Maker was not immutable yet, and I was eagerly awaiting the promised day when that would be rectified, this news of splitting maker out into a compliant, custodian asset collateralized system and a "pure decentralized" one tells me that basically that is never going to happen. I'll observe puredai. I have no interest in the other one.

All this stuff being on Ethereum is a bit of a minus for me too at this point. It works, I'm alright with it the way I'm alright with Bitcoin, but it isn't ideal.

[-] chaser@monero.town 2 points 5 months ago

see what happens to cause it to recover.

this should set you up as a starter: https://www.liquity.org/blog/on-price-stability-of-liquity

I was under the impression that the oracle signal was on chain, from liquidity pools against other stables

that would mean that if even one of those stables dies, LUSD would destabilize too (and there would be no possibility of intervention, since that protocol is completely ossified). that's worse overall.