Hi Paul, it would be very interesting to hear Shahaf's opinion on how Djed is going to be viewed by regulators in the upcoming regulatory landscape in Europe which is MiCA. As far as I am concerned it falls in a somewhat gray area that is not as properly defined as for regular stablecoins like USDC.
quick question, but shen has an independent market price, so if i swap x amount of ada and mint shen, 1 year down the road, both prices rise at a different amount, what is preventing impearment loss when i burn shen, i could end up with less ada than i swapped orginallly?
Is there entry with fiat to mint Djed so for USD directly into Djed and vice versa? Probably will be via centralized exchanges once they connect themselves with Djed/Shen
Thanks. First you are providing your ADA into a contract so its out of your control which means more risk than holding yourself but the main risk is the price of ADA goes down which means the value of the pool goes down too and if the ratio goes below 400% you cant cash out your SHEN through the pool. You should always be able to still sell on a dex though but the price might be lower there as well
What he said about stablecoins working together is what i wish some of the crptyo community could understand. Some coins can coexist and some need each other to get the best experience.
Are any of the fees accrued by the protocol being used to build up like an extra safety fund? Or are there other mechanics to ensure the price peg? If we are at 4x collateral for example and ADA would drop from $1 to $0.20 then there would not be enough collateral to ensure $1 for every DJED burned.
Good question. As i understand it, in such a situation, minting of djed is stopped, which essentially maintains the peg. So it's impossible to go below 400%. And i think the mechanism then shifts to heavily incentivising Shen minting to bring the collateral back up.
Staking rewards and fees for minting and burning DJED / SHEN all go into the main pool which will help the collateral ratio. If the ratio goes below 400% then SHEN cant be burned and can be only minted so you are looking for more people to mint SHEN, also anyone that burns DJED during that time ADA is dropping the fees from that go to the pool as well
Specifically, what happens if the price of ada goes down more than 75%,meaning the 4x overcollateralization is now under collateralized. What happens to djed then? Bank run? We need to know the specifics of what happens WHEN (not if) this occurs in the next bear market
in such a situation, minting of djed is stopped, which essentially maintains the peg. So it's impossible to go below 400%. And i think the mechanism then shifts to heavily incentivising Shen minting to bring the collateral back up.
Could you do a really quick "how to" video of how to bridge from eth mainnet to cardano? I managed to do it but it was NOT easy and cost me a lot in slippage and fees. It's a pity because I'd like to get more into cardano but the ability barrier to entry is quite high
Ya there aren't many good options yet, I know there are other bridges working on it that we should get next year but right now options are limited. Nomad hack closed some of the options through milkomeda too. what path did u use?
@CardanoWithPaul usdt through milkomeda with the celr Bridge. Then to milkada, then unwrapped to ada. Hopefully someone smart comes up with a good way of doing it!
@56Hoperoad69 it's ironic to have to use a cex to go from one crypto blockchain to another. For years now I've heard of cross-chain interoperability yet cardano still operates in complete isolation. This is not the future of blockchain and hopefully for cardanos sake someone creates a simple way to bridge into cardano.
I am wondering... What happens if you are overcollateralized by 800% and ADA´s price falls by 90% in a short period of time? (for example, supose very negative news on regulations and skyrocketing interest rates) Putting it into numbers: suppose at a given moment that ADA price is $1 and we are overcollateralized 8X, then we will have 8 ADA to back 1 dolar of Djed. Now, if ADA price falls quickly by 90%, those 8 ADA now have a total value of 80 cents. I think that in that case you lose the peg, am I wrong? Thank you
From 1/2018 to 3/18 Cardano went from $1.00 to $0.13 So these kind of things happen. And if an algorithmic stablecoin like this is ever implemented, ADA's volatility will go off the charts. When ADA will start to drop in price, this LUNA -like mechanism will amplify the downward pressure.
Yes if it fell that quick and noone minted SHEN during that time the peg could be at risk. As people burn DJED then them fees are added to the pool but if we had a rapid market crash then that mightn't be enough. All fees for Burning and minting DJED / SHEN as well as staking rewards are paid into the pool as well to push up collateral value
it was better if the over collateralised contract's that have ada in it gave the djed holders the staking rewards ,if something is 4x or 8x over collateralised 3% x4 is 12% and the other 3% x 4 12% to shen holders would be perfect anyway /=
Stablecoins are needed because the USD is the world's reserve currency. Once BTC becomes stable and volatility comes within an acceptable range, BTC will be crypto's "stablecoin". There is no way to have a foolproof cryptocurrency collateralized stablecoin.
I’ve gotta say with other blockchain showing us they are shit shows (pardon my French lol) Cardano has a lot to learn and build from so I say to other blockchains keep messing up so we have examples to combat 🤣 😂
my opinion djed is not really decentralised if the staked ada inside the contracts doesn't ! get delegated in community pools and shen get all fees very disappointed on coti
I get 0 for this interview just like every interview I have ever done on the channel. Why would you think its paid? DJED is a very different structure to UST but that still doesn't mean I would fully trust it and everyone should approach it with caution
That shen shit look bad , collateral 100k ada , ada price doble now the collateral is 50k wtf i just understand, im dumb or that sound funny business, please someone tell me I'm dumb, thx in advance
👆 Don't forget to hit like and share if you think it will help others 👆
@Cardano with Paul the link to test net is dead? Thanks
@Billy just checked and working for me. Can you try again
Hi Paul, it would be very interesting to hear Shahaf's opinion on how Djed is going to be viewed by regulators in the upcoming regulatory landscape in Europe which is MiCA. As far as I am concerned it falls in a somewhat gray area that is not as properly defined as for regular stablecoins like USDC.
Thats a good topic I forgot to bring up. If I get talking to him again in Jan I'll bring that one up, thanks
Exactly, this would be good to find out. Great interview still 👍🏻
If it all will be fully decentralized, then no regulation actually can do anything about it. Regulator hands would be tied up then, right
quick question, but shen has an independent market price, so if i swap x amount of ada and mint shen, 1 year down the road, both prices rise at a different amount, what is preventing impearment loss when i burn shen, i could end up with less ada than i swapped orginallly?
Good question, I’d like to have the answer aswell
Great interview! Keep going this amazing work for the entire crypto ecosystem
Thanks Cesar
Djed, Cardano Golden Bullet!
Great interview mate thank you !
Is there entry with fiat to mint Djed so for USD directly into Djed and vice versa?
Probably will be via centralized exchanges once they connect themselves with Djed/Shen
Fantastic interview. Cheers Paul.
Thanks Connie
Hey Paul, thanks for this vid. You asked some great questions. What are the risks associated with providing ADA to the protocol to get shen?
Thanks. First you are providing your ADA into a contract so its out of your control which means more risk than holding yourself but the main risk is the price of ADA goes down which means the value of the pool goes down too and if the ratio goes below 400% you cant cash out your SHEN through the pool. You should always be able to still sell on a dex though but the price might be lower there as well
What he said about stablecoins working together is what i wish some of the crptyo community could understand. Some coins can coexist and some need each other to get the best experience.
Great video Paul, thanks, brother!
Thanks Paul
Great interview Paul.....
Are any of the fees accrued by the protocol being used to build up like an extra safety fund? Or are there other mechanics to ensure the price peg? If we are at 4x collateral for example and ADA would drop from $1 to $0.20 then there would not be enough collateral to ensure $1 for every DJED burned.
Good question. As i understand it, in such a situation, minting of djed is stopped, which essentially maintains the peg. So it's impossible to go below 400%. And i think the mechanism then shifts to heavily incentivising Shen minting to bring the collateral back up.
Staking rewards and fees for minting and burning DJED / SHEN all go into the main pool which will help the collateral ratio. If the ratio goes below 400% then SHEN cant be burned and can be only minted so you are looking for more people to mint SHEN, also anyone that burns DJED during that time ADA is dropping the fees from that go to the pool as well
Why is the test net not allowed in the US?
I'm guessing the same counties that can't use it on mainnet are blocked on testnet too
Specifically, what happens if the price of ada goes down more than 75%,meaning the 4x overcollateralization is now under collateralized. What happens to djed then? Bank run? We need to know the specifics of what happens WHEN (not if) this occurs in the next bear market
in such a situation, minting of djed is stopped, which essentially maintains the peg. So it's impossible to go below 400%. And i think the mechanism then shifts to heavily incentivising Shen minting to bring the collateral back up.
great info here mate cheers as always
Cheers man
Could you do a really quick "how to" video of how to bridge from eth mainnet to cardano? I managed to do it but it was NOT easy and cost me a lot in slippage and fees. It's a pity because I'd like to get more into cardano but the ability barrier to entry is quite high
Ya there aren't many good options yet, I know there are other bridges working on it that we should get next year but right now options are limited. Nomad hack closed some of the options through milkomeda too. what path did u use?
Just convert on a CEX. Like Binance or Coinbase.
@CardanoWithPaul usdt through milkomeda with the celr Bridge. Then to milkada, then unwrapped to ada. Hopefully someone smart comes up with a good way of doing it!
Using a decentralized swap aggregation app is the easiest way to go. I had a lot of luck with SwapSpace (YT doesn't allow links when I post).
@56Hoperoad69 it's ironic to have to use a cex to go from one crypto blockchain to another. For years now I've heard of cross-chain interoperability yet cardano still operates in complete isolation. This is not the future of blockchain and hopefully for cardanos sake someone creates a simple way to bridge into cardano.
Should highlight some quality projects on Cardano like WMT and IAGON 😉
when can we migrate our ERC20 COTI to the Cardano Blockchain and deploy it there?
I'll have to leave that one to Shahaf
Wonder what is happening with USDA stable coin? Djed has taken forever to come to market?
Haven't heard anything since I was talking to Emurgo at the summit but I'll reach out in January to see what the latest is
I am wondering... What happens if you are overcollateralized by 800% and ADA´s price falls by 90% in a short period of time? (for example, supose very negative news on regulations and skyrocketing interest rates) Putting it into numbers: suppose at a given moment that ADA price is $1 and we are overcollateralized 8X, then we will have 8 ADA to back 1 dolar of Djed. Now, if ADA price falls quickly by 90%, those 8 ADA now have a total value of 80 cents. I think that in that case you lose the peg, am I wrong? Thank you
From 1/2018 to 3/18 Cardano went from $1.00 to $0.13
So these kind of things happen. And if an algorithmic stablecoin like this is ever implemented, ADA's volatility will go off the charts. When ADA will start to drop in price, this LUNA -like mechanism will amplify the downward pressure.
Yes if it fell that quick and noone minted SHEN during that time the peg could be at risk. As people burn DJED then them fees are added to the pool but if we had a rapid market crash then that mightn't be enough. All fees for Burning and minting DJED / SHEN as well as staking rewards are paid into the pool as well to push up collateral value
it was better if the over collateralised contract's that have ada in it gave the djed holders the staking rewards ,if something is 4x or 8x over collateralised 3% x4 is 12% and the other 3% x 4 12% to shen holders would be perfect anyway /=
Isn’t COTI a ETH based chain?
Coti is its own chain but has an erc20 version of their token. Djed will run on cardano though as coti are only building the front end
How and where can people get Shen?
Set to launch in January, once it is I'll create some tutorials on it as well
Interesting....🙌
Coti should look into partnering with Wanchain since it addresses cross chain assets in a Trust less and seemless way.
Can SHEN Fees & Staking be Harvested without selling your SHEN?
No you would have to sell your SHEN as all them fees are paid to the main pool and your SHEN gives you a share of that pool
We need "flatcoins": Coins that are pegged to purchasing power. The only such flat coin I know of right now is Nuon.
Stablecoins are needed because the USD is the world's reserve currency. Once BTC becomes stable and volatility comes within an acceptable range, BTC will be crypto's "stablecoin".
There is no way to have a foolproof cryptocurrency collateralized stablecoin.
Djed!!!
Underneath your comment UA-cam translates your message as Grandpa!! 🤣
😂😂
sounds like there is not much advantage for COTI holders in all this
Its more for Cardano. There are some maintenance fees that get paid to the COTI treasury too
I’ve gotta say with other blockchain showing us they are shit shows (pardon my French lol) Cardano has a lot to learn and build from so I say to other blockchains keep messing up so we have examples to combat 🤣 😂
my opinion djed is not really decentralised if the staked ada inside the contracts doesn't ! get delegated in community pools and shen get all fees very disappointed on coti
It just sounds like it won't end well 🤦
Algorithmic stablecoins are risk free, come on, get on the bandwagon!
PS - The Kool-Aid is in the rear, drink up!
Algo stablecoins all carry risk and DJED is no dofferent. I'll talk about the pros and cons in an upcoming video before launch too
"Hopefully we some ADA locked up in this [Cardano LUNA clone]..."
FFS Paul. How much did you get paid to shill this?
I get 0 for this interview just like every interview I have ever done on the channel. Why would you think its paid? DJED is a very different structure to UST but that still doesn't mean I would fully trust it and everyone should approach it with caution
You think it's a LUNA clone?
That shen shit look bad , collateral 100k ada , ada price doble now the collateral is 50k wtf i just understand, im dumb or that sound funny business, please someone tell me I'm dumb, thx in advance
Born and raised Israel... too bad I was liking the project...
yeah whats wrong with born and raised in Israel? You make no sense
Go spew your hate elsewhere thank you
Like anyone has a choice about that
You sound like a well rounded individual 😄
Why does cardano have zero support! Someone pamp it! We need money too, we are people too!
Pump would be nice but unfortunately I don't see anything big enough to pump ada on its own for a while yet.
@@CardanoWithPaul matic hit .3 and than jumped to .9 and still holding .7 effortlessly. This is an investment that strong and feeds holders!
Better not inflate the numbers, like some other chains. it's better to have real economic activity and that doesn't come overnight