About Stable Coins

I went through the article on action stream here(Thought-provoking, must-read pieces on web3) by @jzxchiang . It was completely mind-shifting for me.

I realized that Web3 brings as much if not more changes that the Renaissance did a few centuries ago. I view, now, Internet Computer & ICP as a means to an end and not end to itself.

[EDIT1: to give context to the mindshift, the paper mentions how one can have decentralized UNDERCOLLATERIZED loans by expanding on building blocks of non-transferable tokens. Currently all virtually all defi loans are overcollaterized.]

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Sorry I meant that as to motivate more general regard to cross-chain integration than terra specifically.

This is one of the major hurdles crypto needs to deal with: mapping to real world equity. Otherwise it can too easily just be “another rugpull” that too obviously is benefiting those in the know at everyone’s expense.

Personally, I think the first killer use case of web3 will involve purely virtual goods that have value but aren’t in the “real world”. I’m not sure we have to tokenize a physical asset to get to the promised land.

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What’s to stop a “purely virtual good” from being a speculative catastrophe?

Moreover, if web3 isn’t used for the real world what’s the point? So users who already have the luxury of being capable of connecting can further remove themselves from the real world?

That kind of exclusionary digital utopianism is just as bad as the real thing, imho.

In case I misread your original intent, could you provide an example of a “purely virtual good” that has value but not in the real world?

I mean, not just goods but also services.

For example, this forum is a virtual service that provides tangible value to the people who use it. It exists purely in cyberspace and is currently hosted and moderated by DFINITY. However, I imagine that one day in the not-so-distant future a forum like this would be decentralized and tokenized. The hard part is figuring out what that tokenomics actually looks like IMO.

We actually do agree on this, I’ve had a couple of ideas that have little to do with financial value assets and more to do with what decentralized blockchain can do.

One of the problems is that web3 ≘ crypto ≘ rugpulls, and if blockchain technology can’t be a way to resolve some of this kind of issue, it very much fails the test of hypocriticality: why is “virtually immutable DLT” “so unable” to even deal with the rampant fraud its own technology has brought into reality? Obviously it’s more complicated than that, but as a kind of reality check if we can derive web3 solutions to overcome that kind of abuse of another’s assets/value, it would probably go far in terms of inspiring confidence in the “rest of the world”/everyone still on web2.

This gets to why I originally brought up stable coins–is if web3 can be used to “make money smart” then couldn’t be used to make valuations of real world assets more reliable? more consistent? Less obfuscated? Particularly, for instance, when it comes to the valuation of real estate… a stable coin that could normalize/stabilize real estate prices would likely be quite a challenge, but could be such a good example of the power of web3 (got to admit that “we’re” still so far off from anything like that, realistically).

And if web3 technology could indeed “make money smarter”, it would certainly help defeat the currently popular stereotypes that web3 is just crypto which is just unregulated finance used by criminals (which is a very, very real belief many people have).

Anyways what I wanted to reply with was that likely pne of the easiest ways to approach tokenomics is by appreciating the user as a point of departure. Specifically if the tokenomics can be “crowd sourced” then actually creating the tokenomics can itself be tokenized, which would also more naturally reflect the way decentralized are supposed to independently work. That being said, there was an economist who once defined the concepts of “use value” and “exchange value” where the use value of a thing is the value realized in that thing’s consumption, whereas the exchange value of a thing is a specific case of use value in which the use realized is the value obtained from transacting/trading that thing: in fact, this is what makes a commodity a commodity, since the use value of whatever thing can be transformed by the application of its exchange in the profit derived from trading that commodity, so that any use value becomes realized as exchange value which is what turns a widget/product into a more abstract commodity (since all commodities are evaluated by the same basis of cost, the currency used to exchange that thing).

Sorry that’s more unclear than what I’d have liked, but I bring it up because even if you don’t agree with the author of the idea, it’s a useful distinction when thinking about how “tokenization” happens in existing fiat markets… and how “tokenization” can work in extending either the use value of a thing or it’s exchange value, or both when it comes to users making those kinds of decisions when using web3.

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This looks like a great project, but I’m not sure if here in this thread will do it justice. You might consider starting a new thread in case people have questions, or showing it in the Discord Dfinity Dev or Artist Collective server.

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That being said, there was an economist who once defined the concepts of “use value” and “exchange value” where the use value of a thing is the value realized in that thing’s consumption, whereas the exchange value of a thing is a specific case of use value in which the use realized is the value obtained from transacting/trading that thing

it’s a useful distinction when thinking about how “tokenization” happens in existing fiat markets… and how “tokenization” can work in extending either the use value of a thing or it’s exchange value

Hmm, could you expand on this? I feel like there’s an interesting idea in here, but I don’t quite understand it right now haha

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Perhaps the notion of

(A) confering limited right to use [“usus”]
(B) right to consume /destroy [" abusus"]
(C) right to sell/sublet[“fructus”]

from the paper "Decentralized Society: Finding the Web3’s soul ?

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Apologies for the delay I will, been busy with the hackathon and such and to think about it to make sure I’m being “objective enough” for the benefit of the idea. I will later this week.

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