"Decentralization" in crypto: a faux façade in practice

"Decentralization."

This is what 'decentralization' looks like to me.

Remember the @mirror_protocol proposal where most voted against, but, in the last hour, one addy voted 55% for? It passed.

I've not seen 'decentralization' in crypto.

I've seen the faux façade of it, though.

If you're 'for' decentralization, REALLY be for it.

This means, however, that the stakeholders, eventually, are going to vote in a way that's not aligned to your vision. Decentralization means it's NOT YOUR PRODUCT OR PROTOCOL ANYMORE; IT'S THEIRS. NOT YOURS.

Do you get it?

Insofar as I've seen, nobody, and I mean NOBODY, has ever gotten that message. The devs or the board always owns a controlling voting share.

That, my friends, is NOT decentralization. That is RETAINING AUTONOMOUS CONTROL OF YOUR OWN PROTOCOL.

This may come as a surprise to most, but

hot take: I am all for the creators retaining control of their vision.

hot take: decentralization is like Democracy.

I've never seen either work.

(there's a lot to be said about centralized protocols eff'n around and finding out, too).

I've already pointed out @terra_money, you know, where the CEO just got paid a 4M $USDC bonus for a rekt (again) blockchain.

Now, heeeeeere's @TeamKujira.

It was decentralized? Right?

Then it had the Senate. (REMEMBER THAT??)

Now there was the unilateral rekt.

... and by 'unilateral rekt' I mean a LOT of actions were taken without the consultation of stakers, like, say, oh:

• leveraging more than a prudent amount of $KUJI ("Grown-up defi"? Um, wut?)
• disabling ORCA, so my bids meant what?
• PILOTing $rKUJI
• merging with @THORChain 

Both @terra_money and @TeamKujira both say they were decentralized. Both took unilateral actions that hurt stakeholders, against stakeholder wishes as shown by (lack of) governance.

I'm NOT saying: 'oh, @terra_money, @FantomFDN, @harmonyprotocol, @TeamKujira BAD!' That's for a different discussion.

I am saying if you SAY you are following the decentralized model, FOLLOW THE DECENTRALIZED MODEL, and if stakers vote in not the way you wanted?

Cry me a river, but DON'T YOU DARE doctor the votes. DON'T YOU DARE take unilateral action. Foster REAL staker buy-in and approval.

Takeaway

What does this mean for me? ...and for you?

When I launch my product, I will retain full creative control of that product: vision, direction, execution will all be under my direct control. And I'll be bloody explicit about that.

"Stakers share protocol-profit but do not govern"

C'mon, guyz! Be real!

Let's be real, huh?

You think we, your stakers, are idiots, don't you?

When we OVERWHELMINGLY vote one way, then you come in and BURY that vote with your controlling stake, that's EXACTLY what you're telling us.

Don't think that we don't see that and that we don't know that.

When you set up a Senate, because 'simply, democratized governance is just too chaotic; wah!' then you ignore then disband that Senate, ... what does that tell us, we, your stakers?

Frankly, I'm sick and tired of the bullsh!rt. (thanks, 'Good Place.') 

I'm sick and tired of investing my money into a bright-eyed, 'decentralized,' blockchains, four times, and having that money I've staked just evaporate.

That's why, going forward, I'm going to look at the ACTIONS, not listen to the RHETORIC of 'decentralization.'

Takeaway, part II

• As for me, when I launch my protocol, when YOU invest in it, your money's NOT going to be leveraged, but your stake WILL be invested in CLEARLY-DELINEATED assets. You WILL get returns on your investment on the gains the protocol makes.

THAT, to me, is what staking is about.

• And, as for you: do what you will, but here's my plea:

If you're to launch a decentralized protocol, LAUNCH A DECENTRALIZED PROTOCOL with the controlling voting block going to (non-board, non-dev) STAKERS.

If you don't want to do that, DON'T YOU DARE claim to be decentralized.

Decentralized unstaking on Unstake.fi leads to market efficiency

"The inefficiency of @unstake_fi" in 2 screen shots.

I bought 93 $ampKUJI with 96.2 $KUJI

I can unstake the $ampKUJI instantly for 96.8 $KUJI on @unstake_fi, which is great, but ...

But here's the thing, the LOWEST sell-limit order I put in gets me back 97.1 $KUJI.

To be fair: @unstake_fi is instant, whilst I have to wait for the lowest sell limit-order to fill.

Here's my counter: 

• you can unstake, 
• and still below market price, 
• AND still beat my sell order, 
• AND still make profit to run the protocol.

And @unstake_fi could do all of the above, and quite easily, with an infinite $KUJI well.

My statement is this: until @unstake_fi can better what I can with the LOWEST sell limit-order, I'm going to keep using, and keep profiting, from that market inefficiency.

For context, the LOWEST LIMIT ORDER IS BELOW THE EXCHANGE RATE! ... WAY below the exchange rate!

And that's why, my frens, I think @unstake_fi is doing WAY better than they're letting on, for themselves, OR, they COULD be doing WAY better for the unstaker.

Way better, frenz.

Please note: my sell-order is BELOW the exchange rate, so, that strongly incentivizes a buyer.

They would make money:

1. buy my sell-order
2. slow-burn
3. claim MORE $KUJI than their buy-order.

This I call an infinite well: it pays for itself.

My hope here is that other people see and use this inefficiency but my real hope is that @unstake_fi employs the infinite well to 

1. profit well, still, and
2. offer an exchange rate nearer to market price that incentivizes using the unstaker.

Decentralized Unstaking

Or this, which I have been calling for from @unstake_fi incept date:

• decentralized unstaking.

I provide $KUJI to a pool for $ampKUJI unstaking. When somebody wants to unstake their $ampKUJi, they use that $KUJI and I get paid in $ampKUJI.

Same of $qc-tokens and $st-tokens.

With

• decentralized unstaking

1. The suppliers get paid $NSTK-yields
2. The suppliers get LSDs at a premium.
3. The unstakers get the base tokens, instantly.
4. @unstake_fi doesn't need to front ANY liquidity, as the suppliers do that for them.

• Decentralized unstaking for @unstake_fi:

the path to efficient markets.

• Thanks to @vengo_coj and @_ZRho_ on teh twitterz for their questions and prompts that helped to form this pensée.

Whales and the Mirror Protocol: a case-study of self-determination

To be a Whale in #cryptocurrency doesn't mean you get your way. Case in point: a whale has floated two proposals on @mirror_protocol to lower collateral ratio to 110% for $mIAU and $mSLV: https://mirrorprotocol.app/#/gov 

Why? What is the angle here?

Gold and Silver are the most stable securities in the world. 

Shorting them is well-nigh guaranteed to be safe. And you make yields on shorted assets on @mirror_protocol.

Two advantages then:

1. yields 
2. capital preservation

If I'm a whale, and here's the material point: if I'm anybody, I want to put my investment with the highest return. With a 200% / 150% collateral bracket, for each $2 I put in, only $1 gets the (verra smol) yield. That must be so frustrating, given such a stable position!

So, I, this whale (n.b.: I'm not the whale, btw), put in proposals to rectify this issue. Let's adjust the collaterals down to reasonable levels. And the voters, to a T, agree, but then, what happens?

An even bigger whale, maybe Terra Labs, vetos them. Singlehandedly.

Further, look at the votes on the previous (vetoed) proposals. We, the community, OVERWHELMINGLY voted FOR these proposals.

https://mirrorprotocol.app/#/gov/poll/247

https://mirrorprotocol.app/#/gov/poll/248

It was one, and only one, vetoer that killed these proposal dead, with 4M $MIR. 

Guess.

Who.

What's happening here?

"Is @mirror_protocol decentralized?"

This is the question before us.

We have one whale voting in his self-interest, but fielding a proposal acceptable to the community that gets shut down by centralized control.

We're seeing how 'decentralization' plays out in real time,

Now, I'm not painting this whale as the 'Good Guy' and Terr- oops, the 4M $MIR-owner as the 'Bad Guy,' but I am addressing the question that affects me, and you, and the protocol, and Terra.

"Is @mirror_protocol decentralized?"

These very one-sided vetoes say: no.

Why is this a problem? For everyone?

Terra made a very public statement in its defense a US Gov't suit from the SEC stating it exercises NO control over @mirror_protocol: "@mirror_protocol is decentralized."

The US Gov't can now look at these vetoes and argue otherwise.

So, that's a problem for Terra, but it's a much bigger problem for us, the little guy, not the whale, for us.

Why?

What do our votes mean? We voted FOR. Almost to a person. Overwhelmingly.

The protocol's community voted FOR.

And was shut down.

That wasn't nice.

But if you know me, you know I don't do nice. I do what works, and what works, for me, is that if @mirror_protocol is decentralized, then ALLOW the community to chart the course of the protocol, whatever that course is.

Will we make mistakes? Yes, but how big a mistake is setting collateral for $mIAU and $mSLV? Enough of a mistake to shut down the vote? I don't think so. I think centralized interference is causing more harm than good, to all parties, in this case, and in most cases.

Here's my request, @terra_money. Let decentralization play out. We make a mistake with a vote? LET US make that mistake, and LET US correct it. The dangers of central intervention are clear, AND the disadvantages of decentralization are well-know.

So: let this play out.

Or, if you don't want the community to vote, nor have a say in the vote, stop pretending @mirror_protocol is decentralized, and just lay down the law. Masquerading 'decentralization' makes our votes meaningless and disempowers the community.

And isn't the vision of Terra self-determination via a decentralized currency?

@mirror_protocol is an experiment in self-determination. And this, right here, right now, is what that looks like.