| > Many algorithmic stablecoins like DAI can be fully audited on chain and have proved to be robust (so far, 4 years). You can't make something from nothing. Alogrithmic stablecoins are just the financial equivalent of honey pots. If you can knock them off their peg you can win big and this has happened many times. Perpetual motion doesn't exist and neither do stable long-term fractionally reserved algorithmic stablecoins. This is true of all pegs - even in classical finance. This is literally how George Soros made all his money. [1] MIM and UST are two fractionally reserved algorithmics that got knocked off their pegs yesterday. And this isn't even the first time for UST, I'm led to believe they required a capital infusion of a few hundred million greenbacks to maintain the peg a while ago. > They let you trustlessly borrow USD ... Not USD, no. A stablecoin with an opaque backing. > ... top up your collateral and whatever else you would do with a loan but with no middlemen. Of course there are middlemen, it's the validators or miners and contract authors and liquidity providers. There's a ton of middle men. [1] https://www.investopedia.com/terms/g/soros.asp |
> Of course there are middlemen, it's the validators or miners and contract authors and liquidity providers. There's a ton of middle men.
It's absurd to equate these entities with middlemen in the same sense as central banks and retail/investment banks are middlemen to loans. Again, let's speak the facts, demonstrate in DAIs history:
Where did a validator or miner, deny or cheat a loan? Plenty of examples in traditional finance.
Where did the contract authors or liquidity provides exercise power over the protocol that substantively affected the users of the protocol where it was not transparent and went against the rules which the users signed up for? The same happens all the time with tradfi.