Should we explore launching on Binance Smart Chain? Venus protocol endangers DAI!

I don’t know anything about Cardano. I have taken a look at NEAR. Solana, Cosmos, and PolkaDot. But can’t get around to try any as my preference is Ethereum. Maybe one day I’ll regret it.

I do think Cosmos has a lot going on (Their Dev Community is growing) but I am not sure what Dapps they have or what I can do besides Stake their Atom token. Like they say, most of these L1s are ghost chains. Until someone builds an interesting protocol.

We will see who has the first mover advantage. I would say Solana–but Serum is just a trading platform (as far as I know). Have not tried it.

MakerDAO should focus on burning MKR. That can be done on Binance Smart Chain but there are concentrated risks.

Binance fully controls most of the tokens on their blockchain via upgradeable proxies. There won’t be many opportunities for risk diversity; assets will be either directly or indirectly controlled by Binance. If Binance abandoned their chain it is likely nobody could preserve it. If a malicious third party or disgruntled employee gained access to their keys they could “upgrade” all of the pegged tokens, breaking them permanently.

Binance Smart Chain performance matches Ethereum but they have a much higher allowance for state growth, which may impact their long-term sustainability.

6 Likes

The main point of blockchain is really about decentralization. So for smoething centralized like Bsc, what is it different than a bank controlling everything? Bsc might boom temporarily just because of DeFi craze (similar to ICO crazy 2017), but without blockchain fundamentals i.e. decentralization, it will not sustain.

It is undeniable that Maker is not really suitable for small investors now. After all, we only have 21k+ vaults after 1 year+ of launching. This amount of vaults is really small, compared to what we have back in SAI where Coinbase on board a lot of CDP holders (it was around 200k of CDP IIRC). We are talking about so many different collaterals now, and yet only 21k+ vaults. I have accepted the fact that Maker vaults is not really for retail at the moment. Is that a big deal though? For now, retail investors can still buy and use DAI without owning a vault, they can still experience DeFi.

I stand by with decentralization and I still believe in Maker. I believe the DAO in Maker is seeing the big picture. It is doing well even with just 20k+ vaults holders. And DAI is doing well as well. Perhaps in medium term (6 months down the road) some L2 solutions will appear and suitable for Maker to apply, by then we will have retail investors owning vaults.

4 Likes

It was cheap to create new CDP. A lot of it, was spamming. So, real amount of users was much lower.

2 Likes

Spamming in terms of? Creating CDPs requires gas and have their collateral locked

What do users gain by spamming?

It’s possible that i don’t remember correctly, but i think there were many empty CDP’s created.
I don’t really know what was the reason (gas fees were low at that time), so… could be just someone made a bug in the script. Or maybe he wanted to get some special CDP number.

Coinbase had a program for new users to create a CDP and be rewarded in some small amount of MKR.

Binance Smart Chain is completely centralized with all validators being run by Binance. As a protocol governor and as a vault owner you have no guarantees that the assets won’t be seized either by Binance or a state entity compelling Binance. There is no point in “cheap fees” on a centralized ledger, may as well just use a database.

11 Likes

Binance = AWS

I wrote just a few days ago (5 days ago) about it, and it was 4B value locked on BSC, now it is already 7 billions, there is definitely a big flow of capital moving toward the network

This definitely can be a new fever, linked to DEFI but now expanding to other networks. Hopefully Xdai gets more traction. People are simply looking for cheaper GAS fees and platforms with big liquidity are very important, Binance have the benefits of having already a huge exchange and they are using that to leverage BSC. Plus TBH, most retail investors doesn’t care that much about centralization.

So all comes down to a problem of principles… I’m almost sure now that we (MakerDAO) are not going to give any step toward moving to such “centralized” network. But we could be facing some risks if the new “DEFI killer” gets born in such a network.

I would suggest to support proposals like Deploying on XDAI, but liquidity there is definitely a problem (25 millions on the network is nothing compared with a possible 10 billions on BSC in just a few weeks from now?)… retail investors will move to where the liquidity is, and transactions be cheaper, that’s a fact… in the short term, BSC has a strong point to its favor which I guess we’ll have just to keep an eye on.

1 Like

Hey Adrian–I actually took a look at Moonbeam (PolkaDot) and apparently this is their calling to bridge some of the Ethereum DeFi protocols to their ecosystem by providing a Full EVM

The cool think is the User experience will remain the same ( via Metamask,) like BSC. It will support Truffle, Remix, etc. All via a trustless bridge called ChainBridge

Let me know what you think.

1 Like

Thanks @ElProgreso I’ll take a look! Having same experience via Metamask is definitely helping, because more DEFI-users are already used to it.

I really think we’ll see suddenly an explosion of these EVM-compatible blockchains this year, not sure how we’ll determine when is the right moment to jump in to one of those though (MakerDAO I mean). We could be too early and deploy to one which is not the correct one, and spend resources in that without any result. But if we don’t do it, we could be left behind

3 Likes

Maybe we need a “News” category in this forum which would feature most important DeFi/stablecoin news that might influence the DAI development/price/popularity. I.e. RAI was launced today on mainnet.

I would require that the person who posts the news adds a sentence at the end stating how that news is relevant to DAI (to avoid SPAM).

3 Likes

Usually trending news pertaining to Maker + DAI are posted on the Rocket Chat ( the hustlers usually hang there :wink: ) but I think you’re right–we should also have a News category. And yes, the hustlers went over the RAI launch.

But here’s an interesting read Bit pertaining to how we can overcome DAI stuck transactions on Ethereum and also why this “exploring” of another “chain” has been a pretty hot topic: Why You Should Use ITX Instead of Building Your Own In-House Relayer | Infura Blog | Tutorials, Case Studies, News, Feature Announcements

some users noticed that keeper bots were struggling to submit bids and they subsequently won the the auctions by submitting 0 DAI bids. Overall, the keeper bots just had a bug in their relay infrastructure.

I also think BSC does not follow the same ethos as MakerDAO. If MakerDAO were to launch on a side-chain, I would expect to only allowed bridged assets as backing. Ignoring Binances questionable centralization of nodes, the Binance-pegged assets are not secure. There is a case you can make that BUSD is no different from USDC if its held in a trusted bank account, but “Binance-pegged ETH” should NOT be considered collateral.

I’m not opposed to using side-chains though. xDai is a very promising platform which is launchable today, with a much better decentralization with their nodes. Matic/Polygon is launchable today as well. DOT will be usable in the near future.

In the xDai world, 1hive is the DAO running Honeyswap. They have recently released Honeyswap on Matic/Polygon and are working on cross-chain swaps between the networks, and then creating a L2 rollup that supports both chains. Once that is done, the live Uniswap can be plugged in to their L2 solution (as Honeyswap is just Uniswap using the same LP tokens), making it a tri-chain cross-chain swappable platform with L2 rollups.

I believe that type of approach is where MakerDAO should go. Don’t focus on BSC, but instead launch on xDai, Matic/Polygon and BSC, but only allow tokens that originated from ETH as collateral (unless a chain has native tokens that the DAO votes it in). Collateral happens on-chain from only trusted tokens, and develop a L2 solution that allows DAI to be issued on any chain, using collateral only trusted from that chain.

I would prioritize though a xDai or Matic/Polygon launch over a BSC launch. Similar to how 1hive is doing xDai + Matic/Polygon and THEN adding Eth support last once its plug-and-play, I think it would be best to use xDai and Matic/Polygon as the side-chain, build the L2 solution, and THEN decide if BSC is appropriate or not.

EDIT: Or, include BSC from the start, but make the L2 solution let the DAO decide which directions issueing DAI works. For example, if you lock your ETH vault to use in L2, you can issue DAI / DAI on xDai / DAI on BSC, but if you have a BNC vault on the Binance chain and lock that for use in L2, give the DAO the ability to restrict DAI minting to only DAI on Binance if they choose. This extra lever of control would let us decide which DAI issued coins are allowed to be “Fungible” with the other. It would let us discriminate and say “ETH/xDAI/Polygon vaults on L2 can issue each others DAI, but BSC vaults can only issue DAI on BSC”. If BSC was to ever go down, we know DAI isn’t polluted with BSC collateral and DAI will retain its full value. If BSC ever becomes truly decentralized in its nodes, the DAO can then choose to lift this restraint.

4 Likes

“We love all these scaling solutions for Ethereum. All of those are going to make Ethereum cheaper and more usable and that’s a good thing,” he said. “We’ve looked at all those solutions but they don’t really achieve what we want to do" --Robert Leshner via Coindesk

Are the intentions here to allow Vaults to mint DAI on another L2? The community will probably raise the Dust Parameter to 5000 DAI soon (pricing out folks that are cautious with their expenditures, or can’t afford to borrow that much DAI) – and personally, I think the Dust Parameter should be 10,000 DAI for the protection of investors.

Besides saving on Gas/Tx Fees, what good will an L2 bring for Maker? If folks want DAI on another L2, maybe they should mint it/borrow it here on Ethereum and take it wherever they want? I was a proponent for scaling DAI on an L2–now I’m beginning to think it is not necessary… not sure.

If MakerDAO wants to empower more users, being on an L2 is a good solution, but the BSC is not, we are a descentralized protocol, just for that reason we shouldn’t be over there (it’s to shady).

Next, we should focus on a descentralizaed L2 and give power to users with less capital, i always remember the people that one of the principles of MakerDAO is serving the underserved, so with this Dust parameters we leave out a lot of people around the world, and if we mint DAI on a L2, supply is supply right? I think it still helps to our expansion all over the world.

1 Like

To be honest what worries me the most is not being on other smart chains, or L2 solutions, it is getting stuck in Ethereum until… we’ll be forgotten or phased out. We’re betting on Ethereum being the future of Blockchain, can we guarantee that? Maybe decentralization is not about how decentralized is a chain or protocol, but also about how it embrace many other decentralized chains?

A see more and more multi-chain protocols taking their place on this and next year. Have you read the recent announcement from Compound Finance, lending and borrowing assets from one chain to another, that sounds very very promising!

IMO, if we don’t start exploring options for real, we could be in the future fighting for a share of the lending market. At this moment, I also don’t think that launching on BSC is good for the protocol, it doesn’t mean we cannot explore ways to benefit from it, or explore alternative solutions.

BTW, I fully support deploying on xDai, at least it is a start. Would love to see some Core Unit being created to start work on that!

3 Likes

I believe DAI is being spread out all over–from BSC to even Serum/Solana as an SPL Wrap. My thinking is–it will continue–and if we look at YFI Vaults–they are pushing the DAI narrative–but also that new protocols like Alchemical Synthetic Tokens are pushing DAI hard. I believe DAI is the premier Decentralized Stablecoin with the first mover advantage. But I get your drift, we should not stop innovating.

Although I will admit that I am baffle by the composability of all these Layer 2s. It will become a “war”. However, if folks move to L2s that will most definitely decongest Eth L1–which is good and a win win.

1 Like

I’m not sure I understand how having asset origination on other chains helps/matters at all. If the asset origination/vaults aren’t on the most decentralized chain then what’s the point? Keep the DAI minting on Ethereum and just have DAI acceptable on all of these other protocols. I don’t think we’re going to be able to compete with middleware lending protocols. Our niche is as the central bank that all the big boys come to to get the best price. I know it sucks that some people want to bank the unbanked, meaning universal access/low fees but at this point I don’t think that’s going to be realistic. Focusing on the product (DAI) is more important than the service (vaults) until bandwidth increases.

4 Likes