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