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dawkinsisdope

XRP stablecoin based on collateralization question.

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My question is if a price feed is all that is needed to create an asset in this collateralized ecosystem then could a perfect hedge coin be created to allow collateral to sit in the pool without risk? It would just be a coin thats price fee was the inverse of the price of all debt. I am wondering then if they do that is it essentially then just the same as the collateralization pool shrinking but it could be added back at any time and wouldnt really have an inpact other than not having to leave the synthetic world. 

Obviously I am influenced by the ETH project synthetix which is doing pretty much the same thing but maybe not as well, but just a work in progress. they at least have it running but I like some of the ideas David Swartz had in the liquidating the lowest collateralized positions and the ability to purchase that position to bring back to 150 collateralization. I thought that was brilliant cause idk there are just so many safeguards for the system to remain collateralized and probably would in non volatile times. And I am a little confused tho cause is there a guranteed clearing house feature that prevents any possibility of being undercollateralized? is that possible? 

 

Anyways I think this concept is amazing and wonder your thoughts on it. 

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9 hours ago, dawkinsisdope said:

My question is if a price feed is all that is needed to create an asset in this collateralized ecosystem then could a perfect hedge coin be created to allow collateral to sit in the pool without risk?

I'm not sure I understand the question?

9 hours ago, dawkinsisdope said:

It would just be a coin thats price fee was the inverse of the price of all debt.

What does this mean? I understand hedging, but what is the point of this method, and how does it work?

What/where is the collateral?

Edited by KarmaCoverage

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9 hours ago, dawkinsisdope said:

My question is if a price feed is all that is needed to create an asset in this collateralized ecosystem then could a perfect hedge coin be created to allow collateral to sit in the pool without risk? It would just be a coin thats price fee was the inverse of the price of all debt. I am wondering then if they do that is it essentially then just the same as the collateralization pool shrinking but it could be added back at any time and wouldnt really have an inpact other than not having to leave the synthetic world. 

Obviously I am influenced by the ETH project synthetix which is doing pretty much the same thing but maybe not as well, but just a work in progress. they at least have it running but I like some of the ideas David Swartz had in the liquidating the lowest collateralized positions and the ability to purchase that position to bring back to 150 collateralization. I thought that was brilliant cause idk there are just so many safeguards for the system to remain collateralized and probably would in non volatile times. And I am a little confused tho cause is there a guranteed clearing house feature that prevents any possibility of being undercollateralized? is that possible? 

 

Anyways I think this concept is amazing and wonder your thoughts on it. 

This might help clarify things for you a bit:

 

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9 hours ago, King34Maine said:

This might help clarify things for you a bit:

Excellent video, a few of his comments around making a market for buying out stablecoin (margin loans) that are under collateralized were interesting. Same basic methods as Prosper (Laresn's old startup), and it makes good sense.

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4 hours ago, KarmaCoverage said:

Excellent video, a few of his comments around making a market for buying out stablecoin (margin loans) that are under collateralized were interesting. Same basic methods as Prosper (Laresn's old startup), and it makes good sense.

There's an interesting Twitter thread about this as well as the development of three new transaction types: OracleCreate, OracleUpdate, and StableCoinCreate that Ripple's C++ team are working on. 

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A lot of stable coin initiatives are alive on the Ethereum network, lots of them use mechanics to facilitate borrowing, lending, exchanging using collateral techniques and generally are placed under the nomen 'DeFi' (somewhat 'the next big thing in crypto', currently sized at 1bln USD in crypto held in collateral). It will be interesting to see the effects of this one project on the XRPLedger, as the XRPLedger has good DEX capabilities (speed, orderbooks, autobridging).

Most of these projects have a system where the liquidity provider adds to the collateral and is somehow incentivised in doing so (If you wonder how or where these 8% interest rates come from that you see offered in the space, this is it).

Asset price mostly is determined by Oracles, but there is one project that I find particularly interesting. It's called uniswap. Uniswap determines price purely by market incentives. There is no orderbook and no oracle, the price is determined in a completely decentralised way. And it works, it is really fascinating :-) For inspiration, check out the website and paper to see how it works: https://uniswap.io/ , https://uniswap.info/

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Posted (edited)
8 hours ago, jn_r said:

A lot of stable coin initiatives are alive on the Ethereum network, lots of them use mechanics to facilitate borrowing, lending, exchanging using collateral techniques and generally are placed under the nomen 'DeFi' (somewhat 'the next big thing in crypto', currently sized at 1bln USD in crypto held in collateral). It will be interesting to see the effects of this one project on the XRPLedger, as the XRPLedger has good DEX capabilities (speed, orderbooks, autobridging).

Most of these projects have a system where the liquidity provider adds to the collateral and is somehow incentivised in doing so (If you wonder how or where these 8% interest rates come from that you see offered in the space, this is it).

Asset price mostly is determined by Oracles, but there is one project that I find particularly interesting. It's called uniswap. Uniswap determines price purely by market incentives. There is no orderbook and no oracle, the price is determined in a completely decentralised way. And it works, it is really fascinating :-) For inspiration, check out the website and paper to see how it works: https://uniswap.io/ , https://uniswap.info/

I'm still a novice to the mechanics by which many of these platforms, like Uniswap and IDEX, work. However, I'm getting myself up to speed as we are starting to see more and more DeFi application and DEXs come into play. With that being said, long-term, I think that many of these platforms need to start addressing/implementing key regulatory practices (AML/KYC) that are undoubtedly coming down the road from various regulatory bodies. Compliance will be key to longevity!! 

Edited by King34Maine

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