Opinion: Stabilizing the coin, this pig is ready to fly, but the wind has not come yet.

New York Times reporter Nathaniel Popper said on Twitter on April 8 that "Sources have revealed that Facebook is currently seeking venture capital firms to invest in its cryptocurrency projects. I heard that their goals are large, up to $1 billion."

Facebook+ stable currency? Is it sound tempting, but the more dangerous the more beautiful things, he is largely a pit. After all, take a few lines of code in exchange for real money, who is not willing to try? The last time I leaked user privacy data has not faded, and now it’s coming.

If a giant company like Facebook has mastered the rights of communication tools and central banks, it will inevitably be used by many evildoers and become a platform and tool for their illegality. He anchored multiple French coins in his system to maintain his stability, and his heart seemed to be bigger than the original Dai. Not to mention the push to the outside world, whether the currency he issued can be circulated inside Facebook is a problem. You can't use innocent people as its test field. Remember the original Dai at the beginning?

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In his first white paper, Dai set the initial target price to be 1:1 against the dollar in the entire Maker system, gradually softening the dollar. This simple and plain statement can directly indicate your ambition: to become the world's currency, you must look at the dollar. However, is the stable currency a dreamer, a doer, or a lie?

Can you really accept the CDP contract for over-collateralization?

The emergence of Dai is the inevitable result of a sound decentralized leveraged trading platform. But for the entire system, effective CDP is over-collateralized, which means that the value of the collateral is higher than the value of the debt. It proposes a target rate of change mechanism. Under the target price change rate feedback mechanism, when Dai's market price is lower than the target price, the target price change rate will increase. This will raise the target price, making it expensive to generate Dai using CDP, and the other is the opposite.

However, the perfect system design does not mean that everyone has to accept that the emergence of stable currency is like reopening a central bank in a parallel world, building a perfect financial system, and then letting everyone come to his world. Live in. Just like the establishment of a “perfect new world”, but there is still the suspicion of “empty gloves and white wolves”, using their own virtual numbers in exchange for the real assets of each person, this over-collateralized CDP contract can really accept ?

The ambition to stabilize the currency is greater than the world of blockchain

Any player in the cryptocurrency market does not want the value of the currency they hold to be ups and downs, but hopes to rise steadily. A stable price cryptocurrency is the basic requirement of most decentralized applications based on Ethereum. Like Dai, his target markets are: forecasting, gambling; addressing the hedging risks of financial markets, using mortgage contracts to make it easier for users to leverage transactions, etc.; reducing the cost of cross-border transactions and remittances; The transparency of the books of philanthropy, non-profit organizations and the government… The layout of all this sounds bigger than the entire blockchain world.

In the new world, everyone does not want to be obscured and wants to be the "power" of arbitration. On April 24th, TrustToken, an asset digital platform based in Silicon Valley, announced that it will introduce four new legal coins. Stabilizing coins are TrueAUD anchoring the Australian dollar, TrueEUR anchoring the euro, TrueCAD anchoring the Canadian dollar and TrueHKD anchoring the Hong Kong dollar.

Prior to this, TrustToken had launched the well-known US dollar stable currency TrueUSD in March last year, and launched the pound stable currency TrueGBP in early April this year. This series of actions seems to have returned to the past. Stabilizing the currency is nothing more than a peach blossom source that many people avoid financial risks. The nature of human beings always makes people yearn for mirages. In a short period of economic downturn, everyone's confidence is lost. Any project proposed now is to promote the proportional anchoring of stable and legal currency, but the amount of digital currency is limited. His entire mortgage lending system is limited, but the world of legal currency is not like this. The value of the pair can be set equal, but can the two markets today be equal? If the legal currency world deliberately creates chaos, can the stable currency continue to be stable?

Stabilizing the currency, why do you have a perfect financial system?

The Mortgage Debt (CDP) in the most famous Dai stable currency system has multiple risk parameters. Each CDP category has its own unique risk parameter settings that determine the risk profile of the CDP type and can be controlled but still at risk.

First of all, it is his smart contract vulnerability, not to mention post-maintenance. If the blueprint design at the beginning is wrong, how to start the next project, although there are security experts to conduct code audit, but complete system that conforms to economic norms and safety ratings. Construction is still a long road. Although the developers of blockchain are very hot, there are only a handful of teams that can block the security of blockchain in the world. How can these systems involving huge asset security be developed and maintained?

How to avoid the black swan event of single or multiple mortgage assets? Although his entire system has a risk prevention mechanism, he has not yet accepted the case of a collapse in the price of the currency. The entire system is now an illusion, but it is "a piece of harmony on the surface." Once the event of real theft occurs, the system The wind control mechanism is resistant to no one can guarantee. There are a lot of money and talents invested in the development of stable price cryptocurrencies, so most of his defenders are MKR holders. Once the price fluctuations are too high, or many unexpected events happen, these people still have Not confident to continue to maintain stability?

Centralized architecture is already wrong, what is the future?

The Maker community has invested a lot of money in the caregiver's keeper. This incentive mechanism assumes that the participants will recognize the reward. If the entire system is directly damaged, the compensation is greater. The whole system can't be stable, it's really hard to say. There is also the problem of centralized architecture. His entire team was originally managed by the traditional centralized architecture. All the affairs: cost budgeting, finding new qualified coder, expanding market and users are the team. To complete, if there is a deviation in the quality or ethics of the entire team, then where is the “risk control” of the entire stable monetary system, is his planB ready?

Although the existence of the Maker community exists as a decentralized counterparty to the entire team, both collectives are owners of MRK digital assets and must be given sustained economic incentives to drive them through the security and stability of the entire development process. This may not be possible in the middle and late stages of development throughout the region.

All the stable currency projects will be discovered after careful observation, so their entire design is "playing the government", hoping to have the right to control the market, in the name of decentralization, to establish another centralized financial world controlled by power, It is wrong to anchor the currency. He just wants to delete a group of people, attract more people who obey their value system, and plunder their assets.

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