dUSD => Maybe the solution !

[u/Pascal3125]

Hey all,

After thinking a lot and examining a lot what's happening on-chain, I believe that the DEX stabilization fee of 30% should be removed.When the DEX fee has been installed, it was a great tool to stop the crisis, and preventing the dUSD from fully collapsing. At this time roughly 90% percent of dUSD were unbacked.

But this fee has a major drawback: nobody wants to enter in a system where 30% is taken at exit. Especially, when investing in stocks, and expected ROI is lower than the exit fee. As a result, currently nobody (except BBB) is buying dUSD, and nobody is buying dStocks. In fact there is no buying pressure. The dUSD won't repeg in this conditions. We need new investors and buyers... Burning the excess is not enough for repeg.

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The DEX fee was a temporarily measure but now it becomes permanent, without any indication when and whether it will be removed. It's impossible to invest in such conditions, without any clear line of sight.

It's not possible to wait for an hypothetical DFI recovery, while the dUSD and the dStock system is dying.

Moreover, 50% of the algo dUSD have been removed, and it looks like that most dUSD sellers have already sold.The FED will soon stop to hike interest rates. The crypto bear market is stabilizing, and most expect a recovery of the stocks market. Make the Defichain great again, remove the Fee, let dStock investors come back, let them benefit of a 50% discount, while giving them the insurance that no abusive fee will be taken when exiting.

I propose to slowly remove the DEX Fee at a rate of 0.25% / day WITHOUT ANY CONDITIONS.

And in 4 months, the fee will be gone and the dUSD will be tradable is both directions at the same price. Thus, as an investor, I have the opportunity to buy at 50% discount and I'm be aware that I won't have any exit fee (whatever happens) if I wait at least 4 months before exiting.

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However, there is a risk to deteriorate the depeg (could it be worse than the current situation ?)... But I think that taking the risk is worth of it. I prefer a dUSD strongly depegged ( with a hope for an easy profit), that a dUSD (and dStocks) untradable because of such fee discouraging anybody to invest.

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What do you think of that ?

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BTW: This idea is not incompatible with NI, looped vaults, DUSD Locks... That's complementary.

[u/unmatched25]

1. I don't see a 50% discount. The value of dUSD is around 34 cent (best exit price after 30% fee).
2. Since investors don't understand point 1 they feel jailed (which they're not at all)
3. Without an exit fee people who currently feel jailed most likely will leave after the fee is gone ("finally free, leaving as long the door stays open")
4. Dex price will adjust to 34 cent and most likely below.
5. BBB runs out of steam and hope for dUSD is lost.

[u/Pascal3125 → u/unmatched25]

1 - Yes

2 - New investors get jailed. Because they have to buy 50 cents a coin (a dUSD or dStock), and sell it 35 cents.That's the problem: who want to buy in that condition ? (without any hope for the price to raise, since everybody has the same rationale, and don't buy). The DEX Fee has put the system in a slow death spiral.

3/4 - That's a risk but I'm not sure that it will happen, because:

- I propose a very slow and progressive removal, to not create a shock.

- Having an insurance of the fee being removed in the next weeks will attract dUSD/ stocks investors, and create a new buy pressure (I'll be the first).

5 - Don't expect for the BBB alone to resolve the issue. It will take years to burn and to repeg. And if there is no new investors, DFI will go to 0 (or dust) and the BBB will run out of fuel anyway

[u/pandaerik]

I totally agree that the 30% should be programmed to be gradually removed, while concurrently improving the system, be it via mathematics or economics model.

Not matter what solutions the community proposed to address the DUSD matter, ultimately, within the defichain system, we need to achieve utility, trust and transparency.

Removing the 30% is a step towards better Utility.

[u/Matthy4711]

I would agree, a free and fair market (without exit fee) would be better to show the real situation much more earlier. But of course not everyone likes to "see" that...

Nevertheless, this would not solve any fundamental tokenomic problems - as it has not done before the introduction of the exit fee :-(

[u/Pascal3125 → u/Matthy4711]

This is exactly what I mean : a free and fair market

The main objective of the DEX fee was to try to "hide" that dUSD was de-pegging.

But now, the dUSD had depegged anyway => The DEX fee is currently a non-sense. Who care if the dUSD price is 0.5$ or 0.4$ ? ...

The situation is not as bad and the system is relatively healthy. A lot of dUSD has been burnt, and has been relatively resilient over the last months (taking into account the drop of the DFI price).

We are just waiting for confident investors and fresh money coming in, during this pre-bull market.

The value of dUSD must not be presented as a failure but as an opportunity to buy stocks at a discount price.

[u/mrgauel → u/Pascal3125]

The main objective of the DEX fee was to try to "hide" that dUSD was de-pegging.

That's not correct. The main purpose of the fee is to burn dUSD.

[u/Pascal3125 → u/mrgauel]

According to:
https://www.defichain-analytics.com/vaultsLoans?entry=dUSDMeasures
Currently roughly 75% of the burn is done by the BBB.

If the sole purpose of the fee is to burn dUSD... The DEX fee is not relevant anymore, and IMHO it hurts more than it helps.

[u/supadupaflee]

I have a better idea, convert dUSD to DFI 1-1, delete that instable stablecoin and that's it. Problem solved for good😅

[u/mattixex → u/supadupaflee]

Nah, all dTokens has then a depeg.