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Comment by pjbyrne | Hacker News Reader

> They are claiming that over a sufficient period of time the coin will trend towards its target

This is not what the MakerDAO team, nor any other stablecoin shill, is claiming. They are claiming the system "ensures" that the stablecoin is "a money that will always maintain its purchasing power."

"Ensure" and 'always' don't mean "trend towards over time." They mean always, as in all the time. If their intention is to sell a different product, I can only suggest they make more representations which are a little harder to falsify.

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If what you want is "something that always is worth _exactly_ 1 USD then you are asking for the unatainable. As others have mentioned, it is _impossible_ in an open market to have a true 100% no variability peg. Markets work on supply and demand and the instant that one exceeds the other the peg will drift.

A good stable coin will have pressures that push that drift back toward the target, but it is impossible to stop the drift from ever occurring. The USD itself presumably targets some basket of goods, but it drifts away from that basket of goods. So even the USD isn't a "stable coin" by your definition.

I mean the notion of "exactly" is nonsensical in so many ways, especially when it comes to thinly traded exchanges. I can sell $1 to my friend for $1.10 break the US dollar. Lol.

But isn't 'hover around the same value long term' maintaing the purchasing power? I guess if you interpret the marketing as 'will literally always be worth $1.00' you'll be disappointed but it's weird to take that interpretation when it's not really attainable for anything that isn't a US dollar.

It's not even technically attainable for USD. If China places huge market orders for a basket of commodities with USD, USD would lose purchasing power wrt the basket for a short amount of time (I think a few seconds is possible).

The USD is not pegged to commodity prices.

You're right - what would you say it is pegged to?

Literally nothing.

Then what does the feds 2% interest rate target? Nothing?

The fear of Inflation. But USD is not pegged to anything.

Inflation measures USD purchasing power- how do you think that's measured?

So your claim is "USD is backed by X", it's just that I can't see the X, so tell me, what is USD backed by, without mounting an assault on the term "backed by". Backing means, some concrete promise or claim. USD has no concrete claim or promise behind it.

>stablecoin shill

You make some good points but I'm not sure labeling everyone and everything as "shilling" is helping your case at all.

But how much is DAI straying long term? USDT tethers are also often worth a few percent more or less than a dollar in periods of volatility. Is there hope that the 80% will zero in closer to a few percent in the future like USDT?

If there are thin enough markets of course "always maintains purchasing power" is impossible. This is true for USD ad well.

The difference being that USD doesn't pretend to be pegged to anything. My point about MakerDAO is that the development team is claiming the impossible is possible.

One of the many aims of US monetary policy is that USD doesn't lose too much purchasing power too suddenly (eg no unexpected hyperinflation). Of course any currency from a decent country would aim for this kind of soft peg.

I guess you're technically correct that their marketing material claims to go beyond this in a eay which is technically impossible

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