Dai

Dai survived one of its most significant tests in 2018. “Can Dai survive a market crash?” Asked and answered. Dai survived the 94% drawdown in ETH, and the move from a single-collateral to multi-collateral model should accelerate its adoption in 2019.

DAI is interesting but I don't think they are quite there yet. I had a chat with one of their devs over coffee a couple of weeks ago. I said that as CDPs are essentially banks, they need to think a bit more about what makes banks stable (or unstable).

DAI doesn't scale through arbing. It scales b/c of a killer app: loans. I can borrow $10,000 for a year and only pay 50 bucks in fees to do it. Plus I don't have to sell my assets (e.g. ETH). For most people there is nowhere on planet earth where you can get a loan that cheap.

If you want full crypto-decentralization, DAI still exists and works great.

Bank deposit-backed stablecoins will win (and have already won) simply because they're more capital efficient, and that trumps everything. You can get censor-resistance lite from a network of shadow banks willing to back stablecoins. As long as there's some bank worldwide willing to facilitate the issuance of these things, they will exist. Even the decentralized™ stablecoins like Dai/Sai clearly have an issuer/administrator... so it's not clear that they're any more able to resist coercion than, say, an overseas bank in some tax haven somewhere.

There's a reason there's $4.5b worth of Tether outstanding, $450m of USDC, and only ~$100m worth of Dai. It costs >$1.5 to create $1 of Dai, and it costs ~$1 to create $1 of USDT/USDC. The economics is persuasive.

Consider that banks issuing unaccountable stablecoins might converge, censor-resistance-wise, to administrators of crypto-backed stablecoin systems (which do exist). In that case, the bank-issued coins are cheaper.

A zero knowledge DAI implementation working live on the main chain: https://github.com/AztecProtocol/AZTEC …
Programmable, private, stable. We're slowing approaching the holy grail of currencies.

MakerDAO is more than a stablecoin project. Trustless margin trading provides public information previously only accessible to exchanges

Reminder: the DAI stablecoin's "stability" has failed, in the past, when bots stop functioning. Its gravity-defying character amidst a massive price collapse when the whole market is looking for liquidity makes little sense.

Dai is backed by collateral (currently ethers). In fact, it is overcollateralized. The obvious risk is that if the collateral becomes worthless then Dai becomes worthless.

A better approach is to create something like Maker, which is developing Dai — an asset-backed, hard currency and the first decentralized stablecoin on the Ethereum blockchain. Effectively, the stablecoin is backed by over-collateralizing the system with other crypto-assets. Despite blathering by bloggers, Dai remains valued at one US dollar, thereby retaining its peg.

MakerDAO or something like it will be big. Crypto needs a central bank that's crypto native.

Let's talk about today's MakerDAO / a16z announcement. for those who missed it, a16z's crypto fund bought 6% of Maker tokens for $15M, at a 25% implied discount to the current price of MKR....I'm sure people think this is a great sign for the project - being able to recruit high quality capital. but, i think this is a massive failure in governance and project management.

Credit has greased economic wheels for millennia, and Maker is the world’s first 100% software-based, community owned and operated credit facility. As a family of smart contracts operating on Ethereum, the system offers secured loans of equal cost to anyone in the world. The by-product of loan generation is dai, a stablecoin collateralized using on-chain rules and assets.

We do think it’s a really important idea, to have a coin pegged to something like the U.S. dollar in order to make the experience more mainstream and accessible, [versus a world rife with] these volatile coins. We think it’s such an important piece of infrastructure that there could be multiple winners.

The collateralized model (e.g. MKR, and not Tether) is fundamentally hard to argue against.