News for hackers. Stuff that matters.

A comment on Basecoin, aka the Basis Protocol. Parent comment

Re:Basecoin, aka the Basis Protocol by drcode on Wednesday April 18, 2018 @09:29PM (#16872674)
The inherent problem is that even if you are heavily diversified, in order to back by 50% gold you'd need to have 50% gold PLUS 50% MULTIPLIED BY THE PROBABILITY THE GUARANTOR FAILS.

For ether, such overcollateralization isn't a problem, because you can package it as an ether derivative and have no counterparty risk... But for a gold collateral you would have a risk that cannot be mitigated in this way and the risk will need to increase the slippage of the asset.

[ Parent | on HN ]
Re:Basecoin, aka the Basis Protocol by chrisco255 on Thursday April 19, 2018 @12:54AM (#16873413)
As time progresses, other guarantors will place their assets on the blockchain similarly to Digix. And when other guarantors come online, Maker will be free to add those to the pool. As it stands, Digix provides Assay certificates and undergoes third party auditing. MakerDAO is off to a great start. They're doing all the right things to build a sustainable stable coin.
[ Parent | on HN ]