MakerDAO Weighs Accepting Real-World Assets as Crypto Loan Collateral
What a great time to have exited MKR at $500. Even 'considering' real-world assets as collateral implies a fundamental misunderstanding of crypto. It's official: these douchebags are 100% greedy corporate money-grubbers.
First, because their is zero competition in the space they create a system where they charge predatory & volatile interest rates on users taking out loans that are more than 100% collateralized. Spoiler alert: if you collateralize a loan for more than 100%, it's not really a loan, and charging interest on such a contract is complete nonsense.
It's simply a money grab by the MKR community because they force everyone to pay the interest in MKR; total conflict of interest. I ignored this mechanic at first because the interest rate was only 0.5% in the beginning. Since then it's gone all the way up to like 10% and CDP holders get locked into the new rate without any say in the matter. Ridiculous.
Now they are "considering" real world assets as collateral? That would be like saying, "Hey, lets consider centralizing and undermining our entire project." Oh wait, it isn't 'like' that... it IS exactly that that.
For the same reason one cannot peg a token to gold, one cannot peg a crypto to any physical asset. The reason for this is simple: the ownership of physical assets is always determined in a centralized manner.
If you peg a token to gold and tell people they can trade the crypto for gold anytime they want, where is the gold? It is completely impractical and foolish to trust thousands of people to hold small amounts of gold all over the world. It is also bad security to centralize all the gold to one place where it can be stolen by outside attackers or an inside job (or even by the government).
Crypto is a hedge against central banking and government itself. Projects that trust the government to do the right thing are going to get burned. Imagine MakerDAO allowing property to be used as collateral for DAI loans. Imagine thousands of people putting their house up for collateral. Imagine millions and millions of DAI being created based on this collateral.
Now imagine the government or the banks backtracking and saying:
Well, actually the MakerDAO doesn't own this property, we do.
Yeah, your entire network just got completely undermined because you trusted a centralized agency and centralized laws that can literally be altered at the whim of the elite. Now the entire MakerDAO network is dead, as the value of DAI has been completely destroyed by issuing coins via collateral that doesn't exist anymore.
Again, this is a completely irrelevant argument that is also false. We only have to look as far as Steemit Inc to see the truth of it. Desperate centralized authorities will do anything in their power to consolidate said power.
It is so completely and absolutely moronic and ignorant to even suggest the thing that I am in complete shock that they would even utter those foolish words. It doesn't matter if they actually do it or not; it shows a complete lack of understanding of how this all works. I hereby issue a vote of zero confidence in the future of MakerDAO.
Hey guys we don't need crypto anymore.
Let's just have the FED print out a billion dollars for every citizen!
I'm not joking when I say that even this is a better idea than the one proposed.
Once again, I have to stress that the easiest way to fix HBD will be to issue a similar CDP program (using the bank accounts as collateral) WITHOUT predatory interest rates. Interest rates are completely unnecessary is this new collaborative economy (as long as the loan is 100%+ collateralized). The path forward to building real lasting value is clear. MakerDAO has strayed from the path.
