Hacker News Reader

Comment by ChrisClark | Hacker News Reader

DAI has remained stable, even when ETH crashed 90%, Maker worked perfectly and DAI remained $1 USD.

This is an honest question, and I'm not trying to pour cold water on DAI. What would happen if DAI had a single centralised source of truth which could be mirrored as needed if people lost faith in the central entity? This is a bit like what Wikipedia has, which is a fully open database that can be mirrored ad infinitum -- but still remains the central source of truth as long as people respect the organisation that runs it. More broadly, does DAI really need to be on a blockchain*? Are there efficient non-blockchain ways to make verifiable stablecoins?

I ask this question because a lot of things that are run on blockchains seem like they're losing more than they're gaining. It makes me suspicious of even DAI.

When I say "fully open database", you might object that this compromises a person's privacy in order to make the database mirror-able. But then again, all blockchains are fully open and public, so there's nothing more to be lost there.

* - By which I mean the Ethereum blockchain, which is inefficient like all blockchains currently are.

Ethereum is going to stop being so inefficient in about six months. The proof-of-stake migration will reduce its energy usage by about 99.95%. So that will make it an efficient way to make verifiable stablecoins.

https://blog.ethereum.org/2021/05/18/country-power-no-more/

I suspect if such a service was not hosted on a blockchain, it would be quickly shut down by regulators

Does mirroring deal with this? Somebody downloads the database and hosts it somewhere else, a bit like TPB or Sci-hub. I suggested this in my original post. Which host gets "elevated" to be the official source of truth is decided by community concensus.

Then you run into the problem of deciding who is running the authoritative mirror when the existing one goes down. If there's no single authoritative mirror then you could potentially double-spend your money by spending it in different places on different mirrors.

Mirroring doesn't deal with this because there's always a single target, elimination of which disrupts the whole system, since some time will pass until yet another person puts a target on his back, and there is the problem of finding out which one is legitimate in case if there are few successors.

The US government could make a centralized digital currency without a blockchain. That makes way more sense to me than dealing with all the overhead associated with a trustless decentralized ledger.

They are working on it. they call it a "digital dollar".

funny how everyone refers to coins which are pegged to a massively inflationary fiat currency as "stable"...

The "stable" refers to the absence of massive short-term volatility. The purpose of stablecoins is "banking the unbanked" - in other words, allowing people to spend money who don't have bank accounts. At least I think that's what they're for. It allows people to use USD in the wild, wild west.

>The "stable" refers to the absence of massive short-term volatility.

Nope, See my reply, stable refers to pegged to something and thus stable in value to that something.

The absence of massive short-term volatility is not a property of stablecoins its a property of pegging to something without massive short-term volatility.

Stablecoins exist in the Fiat world too. For example the Bahamian dollar is pegged to the US dollar on a one-to-one basis. So its a Fiat USD stablecoin. It doesn't have a long term stable value (buying power) just like the USD does not.

Stablecoins is a synonym for pegged-coin it is stable to the value of something else not stable in buying power. You could have a gold stablecoin it would have the vale of defined mount of gold and would therefore move in value just like gold.

Reply on news.ycombinator.com