great risk great reward
Back in April I pitched an idea for a CUB stable coin called SAV. I probably made some outlandish claim that CUB would go x100 if implemented correctly. That's because CUB would be forced out of the CUB/BUSD LP, then BUSD would be eliminated entirely and replaced with our own stable coin that's been overcollateralized by CUB in a totally separate farm. This farm would in turn pull $millions out of both the LPs and the den/Kingdom.
For example, there are currently 835k BUSD in the CUB/BUSD LP. If those were swapped for our own stable coin, around $3M CUB would be required to fulfil that demand alone. There also exists additional demand: like the ability for users to now lock CUB and draw SAV loans out of it. I also theorized that if the opposite was allowed (locking SAV and minting CUB), this would created a full-featured futures market that allows both longs and shorts without charging exploitative interest rates (0%).
However, what I may have failed to mention is that these developments would not only take a lot of work, but also add known and potentially unknown attack vectors to the core liquidity pools. That's because in order to peg a stable coin one must trust oracles to maintain a price feed on CUB.
The only way to peg any stable coin to USD is to have such a price feed. We have to know how much everything is worth in USD and the network can't get that information from within the system. It must come from an outside trusted source, which is inherently an centralized bottleneck.
Luckily on Hive we already have these trusted sources: the top 20 witnesses ushered in by stake-based network-wide voting. Ethereum, BSC, and other EVM networks have so such governance structure.
Seeing as CUB is built on BSC, Hive's superiority in this matter isn't very helpful unless we bridge CUB to Hive (which adds another attack vector). Therefore we'd need to get the value of USD from trustworthy source and attempt to plug any security holes at the same time.
For example, if we trusted that BUSD is an accurate representation of USD we could use that ration in the CUB/BUSD pool to determine the "exact" value of USD within the network. This value is then used when determining how much one can mint with their collateral in addition to which CPD contracts qualify as bad-debt and can be liquified. Unfortunately, trusting that BUSD is pegged to USD is the same as trusting Binance corporation. There's a lot of shaky ground round these parts.
Already we can see attack vectors popping up all over the place. If you can modify what the network thinks USD is worth, you could increase it and liquidate positions that should be impossible to liquidate by driving that value up. Pushing the value of USD down artificially would give you the ability to draw() more stable coins than you have in collateral, immediately creating bad debt and breaking the loan contracts at the core.
Conclusion
There's a lot that can go wrong when 'upgrading' new technology to have more functionality. This is why Bitcoin's niche is security and a largely unchanging codebase. It's a feature that allows the rest of the networks out there to branch out and find their own niches.
In my opinion, Hive's niche is governance and reputation. High relative throughput/scaling is a nice bonus, but the real value is in DPOS voting and real-name accounts interacting and generating trustworthiness. We have a long way to go in this regard but the seeds have been planted. New projects can't magically pop up with a five-year history of social networking connections.
I'm very satisfied right now with development and developers across the boards. Seems like everyone is grinding along at a nice pace and progress is being made, even if we do have to keep asking 'wen' every five seconds.
The main thing to consider is that just because we can do something, doesn't necessarily mean we should. There are big rewards to consider, but sometimes the risk is too great. At the same time there are dozens of priorities and a million different things we need to get done. Which ones get completed first is up to us to decide. DPOS strong.
Market Watch:
I made a pretty big deal about Hive/USDT getting a golden cross yesterday, but so did many other coins as well.
We can see that BTC and ETH have already breached their golden cross, while BNB and LTC will get theirs in a couple days. Both BNB and LTC look even more bullish than BTC and ETH due to already trading significantly above the 99 day average. August is still looking overwhelmingly bullish.
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There are so many interesting ideas, and I am in love with ALL of my bags right now.
I'm actually going through my Mainstream Investments looking for more things I can part with.
Cub stable coin would be interesting, but there are so many things getting worked on! lol
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I've bee doing a lot of that also! There is just so much great things going on here and I think crypto (and especially HIVE crypto) is still too small of a part in my portfolio
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I want a hand in every pot. lol.
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Great risk in right direction will surely bring Great reward.
But great risk in a wrong direction will bring no reward or little reward.
Very educative post. Thanks
Thank you for sharing and keeping us informed about the progress of the coin, I hope this project materializes, greetings.
The golden crosses are coming in for the other cryptos so we have a decent chance of seeing another leg up on crypto. Lets just hope some FUD doesn't drag down the entire market.
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https://twitter.com/EdgarGerik/status/1426689906722607104
https://twitter.com/Hivebull/status/1426857992046186496
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Intresting idea. I was too much of a noob (evne more so than now) when you originally wrote about it so I probably missed it back then.
Do you think this issue with the oracles is something that could be adressed with something such as Chainlink's project of smart hybrid contracts and a decentralized oracle network?
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This feeling, I (and am sure most of the community) totally understand
@edicted I agree with you, new developments and expansion is important but we should not take to much risk for doing this, hive blockchain have its own unique niche and strengths as compared to other blockchain
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I could write a long comment, but I say moon!
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Yea i don't think a stable coin will ever work in this space until we have something like mass adoption. My theory is that a stable coin will work under metcalfe's law.
So the real trust vector of a stable coin is in a stable and valuable network. The problem in crypto is we either don't have that or don't know if we do. So for stable coins to really work. I mean really work not baloney work.
We need what metcalfe's law states to be in effect. That is the bigger the network the more valuable. You see it doesn't really depend on miners.. voting systems, algorithims all that is secondary compared to the confidence that would exist in that stable coin. If we know the stable coin market is what it implies stable and solvent we don't have that issue mainly because we know the network that's backing the stable coin is valuable and how do we know that? We know that by network size not if you have several dozen whales in control of the entire economy. Otherwise metcalfe's law doesn't work which we know it does. It works everytime.
So most crypto projects can't and never will have that. If you take something like bitcoin myk and the bbd dollar. It works not because of the trade volume or if you can profit. Currencies are medium of exchanges nothing about profit enters into the equation but the bbd works or will work because it's based on a concept that is likely to gain large networks such as ubi which may one day have billions of participants like many freemium service models that do.
The problem is crypto cares more about profit than utility and stability of it's structure. However economies don't work that way. Every measure of the economy is not just me trying to go out and profit from this and profit from that. So the scale this would work on would be so miniscule i doubt it would work. Until you have a scale level project concept like bitcoin myk it's not really going to work because you won't ever gain the stability or the network size.
That is because especially like i kinda look at it like its two networks. One is a membership network the other is a freemium service network. In the membership network what happens? People pay because they believe that makes the network more valuable and so they become members at a cost and so on and so forth. The problem is membership sites that you pay for always but always are finite in their value to a degree you're never going to have many members.
Whereas freemium services you probably will have alot of members, more stability and volume but less in price appreciation. So it's kinda at this juncture a trade off. In bitcoin myk trade off it's wiling to forego short term profits and making people wealthy over system stability .. stablecoins and distributing ubi to everyone because that's our purpose we feel a more important purpose.
The other direction would be like that of hive.. Where it's probably the enticement is get in here make money earn money profit. Nothing wrong with profit but again one will be limiting to the function of a currency which does the best job at spreading economic prosperity more participants.. over systems that are asset driven not currency driven generally stay in a few small amount of hands and often times don't get to become significant projects on scale. So most are impressed with short term gains on their portfolios so they care less about the stability of the space overall which is fine as well but just know that doesn't solve system wide issues. It just makes a few holders richer but that doesn't impact the system.
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I agree with your bullish TA of BTC Ethereum and Hive. I think that short term there maybe a pullback, but most likely short lived and overall I am bullish, especially on Ethereum.
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