I may be missing something, but I’m not quite convinced that arbitrageurs can prop up a large circulating supply of zBTC without organic demand from borrowers. Mass adoption of zBTC would necessitate lots of open CDPs with interest rates far higher than Maker. Without organic demand from borrowers, arbitraging just sounds high risk.
I would love for this idea to work, so I don’t mean to sound dismissive. I just want myself and everyone else to understand the mechanics in-depth.
I will be voting against this proposal at this time.
While I appreciate the effort and opportunity @0xCryptoseldon, and can see merit in a solution like this, I don’t think this is the right time to use the CEF to invest in a risky token launch (not to sound demeaning but at the end of the day that is what it comes down to).
Do want to stress again that I can see the merit and value of having zBTC as part of the ecosystem, and think it would be prudent for the DAO and individual members to help support the project where possible. I just see too many open questions, ifs and risks for this to be a prudent move for the CEF at this point.
Looking at the vote and comments by some community members it does seem like there is some genuine excitement for the project. If the grant does not pass, will you consider individual/OTC token sales @0xCryptoseldon? Might even be easier to raise money like that
I voted against the proposal, but I am not opposed to voting for it in the future! I just think we need to at least see a prototype or proof of concept before committing half of our remaining CEF funds, just to de-risk things a little.
I’d add another important question to this: which is, if ZBTC were launched today, would you use it? Specifically, would you switch to holding zBTC instead of dollar pegged stables to protect your wealth against inflation?
And more generally, do you want to live in a world where the US government can unilaterally impose an inflationary tax on everyone’s fiat holdings? Or a world where there is an alternative asset to allow people to opt-out? (edited)