DeFi is still more like a failed experiment, 80% of DeFi projects are unreliable, they have weak security and they are more hack friendly, they claim to be decentralized but instead they aren't showing any decentralized motives, the only DeFi projects I trust are not up to five and I choose those DeFi projects because they are more than just DeFi like many new DeFi projects so far, I don't care much about where DeFi is headed, I'm just going to keep picking the good eggs out from the bad eggs, hopeful in future DeFi projects will actually become fully decentralized and more secured
It hasn't failed yet, but with all this about people pulling out more than exists with Maker DAI Coins.
It seems to me that they think it works like Credit, but it does not. They are speeding up a process.
So usually, a Coin has adoption, a low user influx and I saw the best description of the protection people put in for this as a "Bridge Toll" where you invest all you want, get the boost in value, but you are time locked to get our funds. A Bridge Toll is like if you set up a Trust fund for your kid and put in rules, yo get X $$ you must X, and only X per X weeks. That is a Bridge Tool.
So with more DAI taken than exists, all being sold, to fund personal wallets. So people have taken out loans for more DAI than exists, and dumped it on the market, and continue to do so as more people lock up more DAI to then get more other coins. This may work with 1 coin with a staking model with most of those being staked.
But it seems to me whether it is 1 coin drawn out past what exists, or 2 or 3, it won't work. Because someone is going to Buy these and hold them, and make them rare.
And maybe it is ok when everyone is slowly paying.
But there is a Trigger, where everything has to liquify if it hits a certain value, so of DAI, or several other of these Tokens go up in value, there is not enough coins to liquify, they don't exist.
So it seems that this will work as long as the price is going down, but what about when one of these Coins Bubbles to an exaggerated non-Permament but actual traded value, it collapses.
What happens if DAI goes up $5.00 in value per coin?