– stablein, or stable decentralized cryptocurrency Dai on Ethereum (token ERC-20), was founded almost 3 years ago. In the original version stablein called eDollar and its value was pegged to the dollar, but later the developers chose the dollar a basket of major currencies SDR. Like all infrastructure projects, Ethereum, development encountered numerous delays, the final version of the project has significantly changed, but the story described a full circle: the first version of Dai will be tied to the cost of 1 U.S. dollar.
However, in the long term, as the anchor we will set up a dynamic basket of currencies more effectively than USD or SDR. However, after the transition to the new basket, pegged to the dollar stablein will remain, it will be USD-token of the second level provided Dai, and it will be added other tokens that are pegged to the Euro, yen and pound sterling.
Dai is positioned by the creators as a decentralized alternative to the token-such as a Tether, to ensure that real assets raises serious doubts, especially aggravated lately.
9 Dec Maker team has released a new version of the White paper and announced the full launch of the first version of the Dai token, which will be held on December 17 at the public blockchain of Ethereum. Dai 1.0 will be the next iteration of a simplified version of Simple Dai or Sai, which runs from the beginning of August; as well as Sai, Dai software 1.0 will serve only ETH, not a set of different digital assets.
In collateral positions Dai 1.0 is used, the ether, placed in a smart contract is a derivative and the ordinary ETH. It is called the Pooled ETH (ether collateral pool) or PETH.
Applications of Dai
Dai, in contrast to Tether with it almost exclusively, «market» application is universal stankoinkom with a wide variety of applications. Here are some of them:
Bob needs cash, and he emits 100 Dai. To do this, he creates a collateral position (CDP), sending to the smart contract ETH in an amount significantly greater than the cost of 100 Dai. He gets the address 100 Dai and uses them at their discretion. Assuming a Commission of stability equal to 1% per annum, Bob a year pays 101 Dai and gets back your Deposit.
Bob opens a long position on a pair of ETH/Dai. To do this, it emits 100 Dai, placing $150 (ETH) at ETH CDP and buys these 100 Dai. The result is a long ETH/USD 1.66 x. A Deposit of ETH remains on a smart contract until then, until returned to duty plus Commission stability.
Despite the fact that different CDP are not interchangeable, the ownership of CDP can be transferred from one holder to another, which allows you to perform complex actions, for example, with several participants.
Alice and Bob jointly involved in the OTC contract at issue 100 USD Dai, secured ETH. Alice invests $50 in ETH, and Bob – $100 (also at ETH). OTC contract generates a CDP and generates 100 USD Dai, who gets Bob. From the point of view of Bob, he buys 100 USD Dai for a sum of ETH. Then the contract transfers ownership of CDP Alice. Now she has $100 of debt (Dai) and $150 Deposit (ETH). Because all she made it $50 at ETH, at her hands, now long position ETH/USD 3.
Live mortgage pool PETH
Vulnerable point Dai is the lack of diversified mortgage assets. A temporary mechanism PETH was the only possibility of allowing to run Dai at the end of 2017, ahead of the competition. Its main advantage is simplicity of code, facilitating the audit.
The main function PETH lies in the fact that it is a source of recapitalization Dai is the voting token MKR, as it is supposed to do in the next version. If the value of the collateral will not cover the amount of the debt (similar to a margin call, with the difference that the smart contract you can’t add additional funds after opening CDP) the CDP is subject to compulsory liquidation and the amount missing to 100% cover the debt proportionally charged to the holders of PETH. In other words, the sharp depreciation of the ETH is a risk for holder PETH.
On the other hand, holders PETH will profit if the value of the liquidated CDP will be higher than the cost of debt.
After the upgrade, CDP will be diversified, and ETH would be just one of the assets of CDP. Then PETH will cease to exist, and its place as the associated risks and rewards, is a token MKR. In the meantime, the holders of MKR will receive indirect profit from the activities of the system, as the stability fee should be paid only in MKR. Obtained MKR will be burned, reducing the amount of tokens in circulation and increasing the value of the remainder. Given that the appeal is only 1 000 000 tokens MKR, the increase rate may be significant.
Contract liquidity. Operation of Boom and Bust
Boom – buying dai for PETH
Bust – buying PETH for Dai
In the first version of Dai instead of auctions for the sale of mortgages and debts, the system uses the Contract to ensure the Liquidity (LPC – Providing Liquidity Contract). This is a smart contract which can be traded by anyone until the appropriate tools are in stock; prices are determined using an external Oracle account specified by the contract parameter, which is called the boom/bust spread. If this parameter is negative, it means that LPC sells the asset below market value. It is the additional award opportunity for the nodes, including the elimination of the keepers (Keeper, read more about them in the White Book)
The Release Of Dai
The new version of the White Book devoted to the first version of the Dai and only describes the mechanisms that are directly attributable to it. As you gain experience and increase liquidity Dai will make a decision about upgrading to the full version with a diversified non-core assets and will be released a new version of the document, the Purple Book.
From 17 December anyone will be able to open CDP and to issue Dai. Economic mechanisms underlying the Dai is quite complex and even the creators of the platform recognized that often, the basis of the market events are irrational and unpredictable actions of the participants, so it will take time to assess the viability and reliability of the platform.
This article is in no way not intended to be complete and is only platform review Dai: for better understanding a detailed study of the White paper, which is enough discussed in detail possible motivations of the alleged participants of the market Dai.
However, Dai is the first truly decentralized stankoinkom Ethereum. This is surprising because most observers believe that the first will be though more centralized, but also more easy to understand project Digix – tokens, 100% backed by gold bullion. However, according to the blog Digix, his contracts are only now transferred to the final audit, which will take 60 days, so start token DGX, the cost of which is equivalent to 1 gram of gold is expected in February 2018 and, if the audit will reveal serious shortcomings. In any case, gold tokens DGX will be one of the first applicants for participation in the CDP in the next version of Dai.
In preparing the articles used: