A good question came up on yesterday's spce regarding how

Question

A good question came up on yesterday's spce regarding how

the hole in XMD is covered if a a coin is delisted because it is depegged. If there are, say, 1 Bn XMD minted and a stable worth 20% of the basket (ie 200 M) depeggs and is removed from the basket at 0.98 USD and sold for some other stable in the basket on an open exchange, and this amount added to the basket, there is still a shortfall of 200 M x 0.02 USD = 4 M USD. In the MKR/DAI ecosystem any shortfall in DAI due to a global event is compensated for by minting more MKR and selling this MKR on the open market to replenish the lost funds. I recall Marshall saying 2 years ago that this would be paid for by fees generated when swapping out of XMD, but fees for this swap have been suspended. Would they have to change the hard cap and mint more MTL DAO/XMT and sell it for another stable to make up the 4 M? Burning existing XMD is off the table, so just curious how this system is beuffered against a collapse of some stable coin.

#cryptocurrency #english #metalpay

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18.11.2023

3 ответов

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JAM

Pepito⚛️ (Won’t DM First).
https://t.me/MetalPayCommunity/199574

This may not be sufficient in a flash crash scenario. Can't guarantee that all can be liquidated at the set automated dpeg price. The selling begins and takes the price down further. At least I assume. Who knows, maybe there's enough liquidity and speculation to fully exit without significant impact. But generally, @Bronto0508 is raising questions I also have had.

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5 месяцев назад

Decoder1 Автор вопроса

JAM
This may not be sufficient in a flash crash scenar...

I think you are right because if you liquidate at 0.995 you have to sell it but you might not be able to sell it at 0.995 in a flash crash like you say, so the shortfall could be bigger. What might work is a burn and mint mechaism with MTL DAO, where a small percentage of MTL DAO is burned with every vote, decreasing the supply continuously, but then in a flash crash new MTL DAO is minted to cover the shortfall. That is more dynamic, fixes the problem and should satisfy the hard cap crowd because MTL DAO will be largely deflationary except in these flash crash scenarios, which wouldndn't happen much anyway in a regulated space.

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5 месяцев назад

Pepito⚛️ (Won’t DM First). · Accepted Answer

Pepito⚛️ (Won’t DM First).

https://t.me/MetalPayCommunity/199574

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5 месяцев назад

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