We discussed a DSR-like contract for Kolibri but it takes time to build and audit.
SAI was able to maintain the peg just fine even without it
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They probably subsidized it directly for a while by buying dai. From a financial standpoint it just doesnât work otherwise.
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SAI maintained decent peg (0.95-1.05 and 0.99-1.01 most of the time) for 2 years,
I doubt you can subsidize that
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To be fair, it is on mainnet now and stably doing what itâs supposed to without any exploits 
The peg is closer to 1:1 today than when corrective action started. We need QuipuSwap and SEXP along with acceptance on NFT marketplaces, to provide conditions where a soft-pegged asset such as kUSD can start to do well.
Shouldnât work and doesnât work are different things, given we have an example of this working (albeit with some support, arguably, assuming conspiracy theory is true).
The thing I find interesting is⌠what if this does work: kUSD reaches and maintains its peg? What would the possible explanation be from a point of view that this doesnât (shouldnât) work?
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History is full of nation-states trying to escape basic financial principles. It works until it doesnât.
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Imagine two curves, the first one is the amount of kUSD that people are willing to mint for a given stability fee. The second one is the amount of kUSD that people are willing to hold as a function of the stability fee.
If the stability fee is very low, there will be an abundant supply of kUSD as people are happy to mint it. If the stability fee is very high, the supply will be very low. It might not ever be 0 though, there may always be one person willing to mint 0.1 kUSD even if the stability fee is crazy high. So thatâs the first curve, and itâs generally going to be a decreasing function of the stability fee.
Now letâs look at the second curve. If the stability fee accrues to the kUSD holders, you may have an increasing curve⌠some people may be willing to hold it even if the stability fee is 0, just because itâs convenient to hold a stablecoin, but clearly the more stability fee accrues to kUSD holder, the higher the demand to hold it.
If on the other hand the stability fee does not accrue to holders, as is the case in Kolibri, well you will still have some people who want to hold it, but they will be unaffected by the stability fee, so the curve will be a flat line.
In both cases, the supply curve is going to intersect with the demand curve. The stability fee at which they intersect is the one at which the peg will be maintained.
In the case of Kolibri, the stability fee will rise until the supply of kUSD corresponds to what people want to hold, absent any reward. So youâll have a peg, but the resulting supply will be low. You will have a few users who care about holding it, and a few minters who are willing to mint even with high stability fees. Go ahead and draw them on a piece of paper.
If, on the other hand the stability fee accrues to kUSD holder, the intersection will happen at a lower stability fee and correspond to a larger supply, because as you increase the stability fee, the demand increases which makes the curve intersect sooner.
One last word: because some people are willing to hold kUSD for the convience of it, sometimes the interesection between the two curves is going to happen when the stability fee is negative. This has happened to DAI and the peg broke because it didnât support it.
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weâre not arguing against it.
weâre just saying for now we can get by without DSR. until we implement it
even though the supply will go down
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Sure, I think we might disagree on how much the supply will go down by though.
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Another 1% increase of the stability fee (to 8.5%) has been submitted in operation hash ooG674FtGwBXsyQB7Ery3iXtP86aNcWrtzNJDQGZ57pm32SCR9X.
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 12.76%. EMA10 Data is available here:
https://p.datadoghq.com/sb/e72980047-41e546b0c453a72015620c4d8002646b?from_ts=1614802054474&live=true&to_ts=1615406854474&tpl_var_network=mainnet
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Another 1% increase of the stability fee (to 9.5%) has been submitted in operation hash ooYUZ6Ru4ZDh6bDqafuDxgtnKPoNMAW7UUGNSEoXs6gDXuNmwk2 .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 13.95%. EMA10 Data is available here:
https://p.datadoghq.com/sb/e72980047-41e546b0c453a72015620c4d8002646b?from_ts=1614802054474&live=true&to_ts=1615406854474&tpl_var_network=mainnet
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Another 1% increase of the stability fee (to 10.5%) has been submitted in operation hash onxgULN42AF3hXxaLU9qExS7LDMf7V1m9zgyRuDYJ4Hr39MQuUA .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 11.83%. EMA10 Data is available on our metrics dashboard.
1 Like
Another 1% increase of the stability fee (to 11.5%) has been submitted in operation hash ooC9G3YYtJamHT971tfwtiGyZ5i9qMvxzxdS6AioiPeJip4h1oW .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 8.66%. EMA10 Data is available on our metrics dashboard .
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Another 1% increase of the stability fee (to 12.5%) has been submitted in operation hash oonxJxJucpeYT9j7gtoj8r3wsAhuQVsMmdUxvEef2YCAFFEGTem .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 10.22%. EMA10 Data is available on our metrics dashboard .
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Another 1% increase of the stability fee (to 13.5%) has been submitted in operation hash ooRgZyhWqWhYEaoReV6zELMsMWes1KfX7PjECp5mjEz4EkeD6cp .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 11.62%. EMA10 Data is available on our metrics dashboard .
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Any timeline for when these modifications might be made by the community via a governance token?
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Another 1% increase of the stability fee (to 14.5%) has been submitted in operation hash opW32uY4tKkKwNnnPp5inijhhqnonad34canhFq8QEC4jTAZkzV .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 11.6%. EMA10 Data is available on our metrics dashboard .
1 Like
Another 1% increase of the stability fee (to 14.5%) has been submitted in operation hash oniyqvLaGm3z78HEKJu6zacrECzv3cfjyhwkt2yrm87HcHiLT7q .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 12.01%. EMA10 Data is available on our metrics dashboard .
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(Sorry that I missed your post)
Weâre unable to share timelines at this time. We also do not have definitive plans to have a governance token and we may very well never have a governance token.
We are interested in giving up control of the system to the community in some way, but weâre still investigating and considering the best ways to do that. Right now, our focus is on using the levers we have to move the price to peg.
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Another 1% increase of the stability fee (to 16.5%) has been submitted in operation hash opHcn3yMnyYbTNnKtfXR2GatBDXbwRMXiuNMs4BgnxVPKe645aZ .
This increase is now in the timelock for 8 hours, after which time any member of the community may execute it.
At current time our EMA10 is 8.84%. EMA10 Data is available on our metrics dashboard .
EDIT: An earlier version of this post incorrectly stated the raise was to 14.5%
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Oh wow. Thanks for the info.
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