In the aftermath of the so-called "Black Thursday" crash from several weeks ago, MakerDAO's "DAI" ethereum backed dollar pegged stablecoin came untethered and was, for a time at least, functionally insolvent. In the aftermath, holders of the MKR token which allows holders to participate in governance decisions opted to do a couple of things, including adding the centralized stablecoin USDC to the list of acceptable collateral, which drew both condemnations mostly around centralized risk being added to the system and praise for making the system more robust against sudden ETH collateral price crashes.
\nAnd now most recently, the Maker Foundation which had held some centralized control over the protocol completed their long-planned exit with all authorities now transferred to the holders of MKR tokens, removing both a point of control which had been used as a safety check and a point of risk in that centralized control can be co-opted and used to disrupt a system as we've seen in other examples.
\nOn today's show we're digging into:
\nWhat is Decentralized Finance (DeFi)?
\nHow does decentralized finance differ from traditional banking?
\nFractional reserve vs over-collateralized loans
\nLiberty Dollars\u2019s missing collateral and USDC\u2019s risky name
\nMakerDAO, DAI dollar-pegged stablecoins and how this DeFi stablecoin actually works
\nSDAI (Single Collateral DAI) vs. DAI (Multi Collateral DAI)
\nSmart contract \u2018vaults\u2019
\nLending money to yourself: 150%, 300%, insurance and auctions
\nWhat happened on \u2018Black Thursday\u2019 as the price of Ether dropped more than 50%
\nWhat happened when transaction fees went through the roof
\nA bug in the collateral auction smart contract
\nA surprising crash: as the system became functionally insolvent the price of the dollar pegged stablecoin actually went up.
\nOasis.app vaults are transparent and pretty interesting, take a look!
\nLoaning yourself money using your ether (at interest)
\nHow MakerDAO\u2019s approach differs from SALT Lending
\nThe other half of the DAI system: saving vault smart contracts
\nDAI Saving Rate (DSR) and the new certificate of deposit
\nThe reward for using MKR tokens to administer a good system
\nCan savings vaults be liquidated?
\nSmart contract risks, consensus risks, systemic risks and response time risks
\nSponsors: eToro.com and Purse.io
\nWhat specifically went wrong with the auction smart contracts?
\nRecapitalizing the system by diluting MKR governance stakeholders
\nEven with bugs, market mechanisms to fill the solvency hole seemed to work better than government bailout equivalents.
\nCompleting the transition from foundation-overseen to full tokenized governance.
\nDecentralization transition - A necessary step or a natural one?
\nSingle collateral vs. Multi-collateral stablecoins
\nWhy would a decentralized stablecoin want to allow a centralized stablecoin for collateral?
\nExternal political risks vs. internal technological risks
\n\u201cLife finds a way\u201d and DeFi\u2019s natural circuit breakers (also Mt.GOX)
\nWhats the point of putting USDC in to get DAI out?
\nHow does DeFi stablecoin insurance work?
\nA modular ecosystem
\nHow DeFi and traditional finance are similar
\nDeFi vs. 2nd layer protocols
\nCredits
\nHosts: Adam B. Levine, Andreas M. Antonopoulos, Jonathan Mohan & Stephanie Murphy
\nSponsors: eToro.com and Purse.io
\nMusic: Jared Rubens and GurtyBeats
\nEditing: Jonas