Conversation
Replying to
uniswap isn't where the FTT liquidity is so don't think it's the right think to compare to here
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I think that misses the forest for the trees here, no token with $2M in total daily liquidity can handle $78M being liquidated at once without a major downward price collapse (furthering the insolvency)
This isn't necessarily a $FTT issue, but an issue for Cream and its users
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Replying to
yeah hear you on that, just think the uniswap datapoint was wrong
also FTT does have a lot more support than it looks like but that's not obvious from anything easy to tell
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like not saying your point is crazy here--it's not!
just that you're overplaying your hand a little bit, like playing as if your point is 2x stronger than it is
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I really don't think I am, 25% of the entire $FTT is on Cream, that's 39x the daily volume and 40% of all collateral on Crean
No matter how you paint this, it's incredibly risky for users, depositors are already having issues withdrawing their funds due to a lack of liquidity
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Replying to
guess we're going to have to agree to disagree then, not saying you're totally wrong here just that there's nuances to it, but if you're not willing to give any ground here then :shrug:
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so:
1) uniswap was a bad datapoint
2) otc market is really deep for FTT
3) I personally am happy to buy a bunch
4) coins with buy/burns etc. tend to have away deeper liquidity
5) there's a flip side to this: the more you cut down on lending, the less usage the protocol gets
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I also think this is missing the prob bigger point.
FTT is a relatively stable, low-beta coin; in large market moves everything is down which doesn't affect cream.
The larger worry for borrow/lending: what if all of DeFi goes up/down a ton? Things are correlated.
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We've seen 5x swings in DeFi overall; going in either direction is possible.
If that happens, then all DeFi coins move mostly together, and any wBTC/ETH/USDC/etc. vs DeFi basket blows out 5x.
That's true of all DeFi borrow/lending, and is the larger risk.
large liquidity ready to handle liquidations even in volatile markets is what really prevents this from blowing out during large moves.
That's hard!
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