DeFi Note

Economic and Financial things are not here, rather in the Economics L1 folder.

Abbreviation	Meaning
PoS	Proof of Steak

@2021-11-26
Resource Synthetix litepaper
New understanding to PoS model
This is like what I thought before. We can use ETH to buy more computer to buy more new miners, then with them, mine more Ethereum. We repeat this process and never stop. PoS means that we don't need to actually purchase any devices, because most of the power the calculation power is wasted in the competition. We don't need such a high cryptographic security level. Also PoS converts some of the cryptographic security to vouched security, by the STAKE space The benefit is that the staking action now is like buying a new new devices, they can generate calculation power making stake == security.
I thought starting a bank is very profitable when watching Monetary Policy. And it seems much easier to start a cryptocurrency bank than a real one.

It seems they maintain the Collateralization Ratio via Stake Profit, which is given by the decay rate(like inflation?) but not by FFR. They can control the inflation of their money (they do have a central fund pool but I don't think this makes the SNK centralized). This is like a old-school way to control the real price of a fiat money. Since 80's, more and more central bank started to affect the real price with equivalent concept of FFR. Maybe we should consider this way too?
Made a diagram here
Official diagram on Synthetix System Documentation/Smart Contract Architecture

-	Medio	Yan	Total Debt
Step1 Starting	50k	50k	100k
Step2 sBTC	50k	-	100k
Step2 iBTC	-	50k	100k
Step3 sBTC	75k	-	100k
Step3 iBTC	-	25k	100k
Step4 Final	75k	25k	100k
Step4 Debt Owed	50k	50k	100k
Net Profit	25k	(-25k)	100k

I thought this was wrong because BTC price raised from 1=100% to 1.5, and Yan's investment value should decrease to 1/150% of its original value. But actually it is correct, because it's a short
[ ] Question: If the currency value changes, will it affect on all stocks (like AAPL)?
If we all mint one same type of Synth, the percentage of debt will always be the same. Even if the price of stock(IRL) changes, the debt in eUSD will not change. So synthetix exchange is harder to earn money assuming that all counterparties are better than average in a normal exchange?
[ ] Maybe the point above can be improved by investing real market with some part of the pool?
[ ] Read Chainlink paper
[ ] Read Uniswap paper

Exit the system and unlock their staked SNX, they may need to burn more Synths than they originally minted.

Intuitively this is not safe since an anonymous identity can hold negative value (when short selling and increase is more than 100%). So one can create multiple accounts then discard those with negative balance. But after some thinking, it is not easy since synthetix exchange can hold all the locked assets.

@2021-12-02
Synthetix Network Token Whitepaper
[ ] Find a not deprecated resource of the white pater.
Trust of a brand is also part of cost. It's like a tax. In DeFi we trust algorithm instead of brand.
Wall street workers needs to foresee what will happen in the future (like the usage of cryptocurrency), so they will invest enough to earn more. When popular cryptocurrencies has their own value(like volatility), it can always convert to fiat money like USD.

[ ] ADD the DRAWIO file
Imagine 1 havven = 100US$ = 100 nomin at time T0, when user put the havven into stake. Then the price of havven goes down to 1$ at time T1, user should be requested to stake more havven(before T2) to keep the collateral value. But in Havven it is not explained maybe nor designed like this.

Think of a case that a havven holder with 10% total havvens sell off 5% of total havvens. This will affect the price a lot. Then more havvens will be requested to add to the escrow. I see what is wrong here: no one can hold this quantity of havvens, it's just like stock price manipulation. But manipulating stock market is a crime? So I run into Pump and dump.

The core in assuming that the fee(total transaction fee) is proportional to the total amount of nomin. So locked havvens can have a proportional increase with the inflation. (For me the inflation system is better than bitcoin fixed total amount.)

Problem is there would be a limit of require of nomin, because it represents volatility. Say we need to exchange products/assets with an amount of $100B, all with nomin. It grows $x$ yearly on average.

If $C\lt 1$, then we have enough collateral to back the value of nomin. But this is not how bank works.

Why $C_opt$ should be 1? As discussed above, maybe we don't need such volatility.
I made a mistake that the profit of stake is not from gross exchanged asset but the number of transactions(and recently it's always increasing), because the amount doesn't matter.