DAIhard: the unkillable crypto/fiat gateway. Any country, any fiat. Proudly announcing the open beta on mainnet. : ethereum
(Source: reddit.com)

clicks | 3 months ago | Google AI sentiment 0.20 | comments: discuss | tags: ethereum

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(Original link: reddit.com)

Here is a legitimate concern most of us are familiar with:
To enter or exit the crypto economy, we rely on exchanges, which track their users, impose limits, and are coupled to their jurisdiction. And for all we know, any day now governments could start shutting down the exchanges altogether. In light of this, can we honestly say that crypto is anonymous, limtiless, borderless, immune to regulation, and unstoppable?
To really address this concern, we need a completely decentralized fiat-to-crypto on-ramp platform: something that extends the benefits of crypto to the very act of moving between the fiat and crypto economies. But the design of such a platform is far from obvious. (Bisq comes close, but contains some crucial centralized compoments.)
We believe we've found the solution. We are proud to present DAIHard, currently in open beta on mainnet (and Kovan).
If you want to jump right in, we recommend first watching Using DAIHard to buy and sell DAI (12 min), then diving in and giving it a shot with a small amount of DAI. (Feel free to try it on Kovan if mainnet is too scary at first.)
Okay, but What Is It? DAIHard extends many of the promises of crypto (borderless, anonymous, limitless, unstoppable) into the exchange mechanism itself, allowing anyone anywhere to bypass centralized exchanges and the control they impose.
More concretely, DAIHard is a platform, run on smart contracts, for forming one-off crypto/fiat exchanges with other users, in which:
The method of fiat transfer is open-ended, but agreed upon up-front (for example: bank transfer, cash handoff, transfer of online credit, or really anything the trade initiator thinks up). You and the counterparty can communicate via end-to-end encrypted chat to coordinate the fiat transfer (i.e. communicate bank account number, or describe a cash drop location). In the last phase, the Seller can choose to burn the DAI instead of releasing it to the Buyer (but he can't get it back). This credible threat is what makes the platform reliable in the absence of centralized control or moderation. For more on this see the DAIHard Game Theory medium article (10 min read). Using DAIHard to buy and sell DAI (12 min) shows this process in action.
Drawbacks You Need DAI (and ETH, for gas) to Use The Tool (At Least For Now). This is the biggest drawback of the platform in its current state: if you want to buy DAI, you need 1/3 of the purchase amount to put into the contract as a burnable deposit . Put another way, if you only have 10 DAI now, you can only open a buy offer for 30 DAI, and must wait for it to complete before using the newly bought DAI to open up a bigger offer.
(The 1/3 ratio will be customizeable in a future version, but even if it's set to 0 (which comes with its own problems), the Buyer still needs ETH to pay gas.)
Most tragically of course, this means that if you don't already have some crypto, you can't use this tool to get crypto. This comes from the fact that both parties must have "skin in the game" for the game theory to work, and a smart contract can't hold fiat--only crypto.
We have solid ideas on how to address this drawback in the not-too-distant future, but for now it's time to launch this thing. We'll write more about these ideas soon.
Dangerous and Scary To Use In rare cases, a user may have to burn DAI. In all cases, the user must risk the credible threat of burning DAI . Our medium post on the DAIHard Game Theory explains why this is necessary.
A cautious, rational user can gather information (probably via our subreddit, r/daihard !) about how people have used the tool, successfully and unsuccessfully. They can then create a buy or sell offer with wisely chosen settings based on what has worked for others. Other cautious, rational users can find this offer and commit to the trade if they dare. We expect the vast majority of committed trades should involve rational, cautious users, and should therefore resolve happily.
But each trade must contain a credible risk of burning DAI , and inevitably there will be sloppy trades that result in burns. It will be interesting to see how long it takes for the first burn to occur.
Unlike the previous issue, this drawback will stick around: credible risk of burn is absolutely necessary for the platform to function without centralized control.
Strengths Unkillable The core of the whole system is the Factory contract. It has no owner, as well as no suicide or pause code. Barring some unknown bug, it cannot be stopped, and will happily open new offers for anyone who has the DAI and can pay the gas cost in ETH, and will also list all created trades for anyone with access to Ethereum. This will remain so for as long as Ethereum remains functional.
The HTML/JS front-end is currently hosted on Github pages, which is centralized--but even if Github takes down the page and deletes the code, it's a minor step to get the page hosted on IPFS (which is on our near-term roadmap in any case).
Like Toastycoin , this thi...