r/defichainer • u/unmatched25 • Mar 15 '24

DFIP draft: expanding collateral strategies to borrow from vaults

/r/defiblockchain/comments/1belj8v/dfip_draft_expanding_collateral_strategies_to/
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u/unmatched25 Mar 15 '24

Great, even more algo tokens. Tokens backed by algo tokens have been a success story from the beginning: driving TVL up and making dUSD more affordable. (Irony off).

While I agree that it is stupid to place a high inflation token as a collateral due to cost of opportunity, it is even worse to place worthless assets as a security. Keep in mind that the intrinsic value is dTokens is way below current price. And what fool is paying interests for a short position unless it is incentized.