Yeah I get it, the free market argument, but it’s

Question

Yeah I get it, the free market argument, but it’s

called dGME. But in reality , it sounds like the only correlation it has with the asset it’s supposed to represent is a collateral requirement t and a starting price. After that, it could go to the moon while the real company files for bankruptcy. Right?

#blockchain #cryptocurrency #defichain #english

0

09.02.2022

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Larry

The dTokens are capped at roughly 150% the oracle price b/c if they go over that value you can arbitrage by creating a 150% vault, minting dTokens, and sell them for more value then your collateral. It's this cap that makes the dTokens 'follow' the underlying asset, albeit at an inflated value.

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09.02.2022

DFWJosh Автор вопроса

Larry
The dTokens are capped at roughly 150% the oracle ...

Ah gotcha, that’s what I was trying to figure out. So there is a mechanism to pull the price back down. Thanks

0

09.02.2022

DFWJosh Автор вопроса

Dennis Washington
Again if it exist in a vacuum sure, but in reality...

Sorry, argument was a poor choice of words. I’m not suggesting we should have more regulation or not. Just wondering what mechanism is in place to keep the price around the oracle. Larry answered it for me. Thank you.

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09.02.2022

DcShel Shelton

well that's an interesting question. When the oracle goes down, so the vaults that minted the tokens get locked. I'm not sure what was put in place to take care of that. Probably just a lock until another emergency vote on what to do next. lol

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09.02.2022

Dennis Washington · Accepted Answer

Dennis Washington

Again if it exist in a vacuum sure, but in reality if it drops in price, the Collateral required drops, there is arbitrage and the Dex price falls. As we have seen happening for 2 months. The free market is not an argument, it is the idea put forth in the documentation for the project, and the basis for the entire system.

0

09.02.2022

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Yeah I get it, the free market argument, but it’s

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