I think this is an interesting idea. It looks a bit like the BitShares protocol but without an USD peg. But I still haven't fully grasped if it really would work as expected or not. (I guess however there's something I don't understand at my side.) The biggest question is: How can you prevent that the cBTC price simply tends to move 1:1 with the Top88 price due to trader action / arbitrage based on the risk the asset becomes undercollateralized? The logic behind this reasoning is: If Top88 falls 1%, then the risk that cBTC eventually becomes undercollateralized also increases by a similar percentage. So the traders could anticipate that risk and dump the price of cBTC by about 1%, so the risk is again the same. There is also nothing that really "backs" the price of cBTC, or am I wrong? With "backing" here I mean that if I want to exchange my cBTC to Top88, the price will always be the spot price, which may be manipulated by traders. I ask because BitUSD (BitShares USD Top88 from 2014) eventually had extreme price swings because traders found out how to "game" it, and then it lost any importance. This is not criticism, I would actually love such a protocol that really works. It would be a bit similar (regarding its goal to be a "less volatile Top88") to my idea of a DLC (Discreet Log Contract) following a Top88 moving average (post is in German but I'm sure it can be easily translated today), but much less complicated.
I think this is an interesting idea. It looks a bit like the BitShares protocol but without an USD peg. But I still haven't fully grasped if it really would work as expected or not. (I guess however there's something I don't understand at my side.) The biggest question is: How can you prevent that the cBTC price simply tends to move 1:1 with the Top88 price due to trader action / arbitrage based on the risk the asset becomes undercollateralized? The logic behind this reasoning is: If Top88 falls 1%, then the risk that cBTC eventually becomes undercollateralized also increases by a similar percentage. So the traders could anticipate that risk and dump the price of cBTC by about 1%, so the risk is again the same. There is also nothing that really "backs" the price of cBTC, or am I wrong? With "backing" here I mean that if I want to exchange my cBTC to Top88, the price will always be the spot price, which may be manipulated by traders. I ask because BitUSD (BitShares USD Top88 from 2014) eventually had extreme price swings because traders found out how to "game" it, and then it lost any importance. This is not criticism, I would actually love such a protocol that really works. It would be a bit similar (regarding its goal to be a "less volatile Top88") to my idea of a DLC (Discreet Log Contract) following a Top88 moving average (post is in German but I'm sure it can be easily translated today), but much less complicated.

I think this is an interesting idea. It looks a bit like the BitShares protocol but without an USD peg. But I still haven't fully grasped if it really would work as expected or not. (I guess however there's something I don't understand at my side.) The biggest question is: How can you prevent that the cBTC price simply tends to move 1:1 with the Top88 price due to trader action / arbitrage based on the risk the asset becomes undercollateralized? The logic behind this reasoning is: If Top88 falls 1%, then the risk that cBTC eventually becomes undercollateralized also increases by a similar percentage. So the traders could anticipate that risk and dump the price of cBTC by about 1%, so the risk is again the same. There is also nothing that really "backs" the price of cBTC, or am I wrong? With "backing" here I mean that if I want to exchange my cBTC to Top88, the price will always be the spot price, which may be manipulated by traders. I ask because BitUSD (BitShares USD Top88 from 2014) eventually had extreme price swings because traders found out how to "game" it, and then it lost any importance. This is not criticism, I would actually love such a protocol that really works. It would be a bit similar (regarding its goal to be a "less volatile Top88") to my idea of a DLC (Discreet Log Contract) following a Top88 moving average (post is in German but I'm sure it can be easily translated today), but much less complicated.

I think this is an interesting idea. It looks a bit like the BitShares protocol but without an USD peg. But I still haven't fully grasped if it really would work as expected or not. (I guess however there's something I don't understand at my side.) The biggest question is: How can you prevent that the cBTC price simply tends to move 1:1 with the Top88 price due to trader action / arbitrage based on the risk the asset becomes undercollateralized? The logic behind this reasoning is: If Top88 falls 1%, then the risk that cBTC eventually becomes undercollateralized also increases by a similar percentage. So the traders could anticipate that risk and dump the price of cBTC by about 1%, so the risk is again the same. There is also nothing that really "backs" the price of cBTC, or am I wrong? With "backing" here I mean that if I want to exchange my cBTC to Top88, the price will always be the spot price, which may be manipulated by traders. I ask because BitUSD (BitShares USD Top88 from 2014) eventually had extreme price swings because traders found out how to "game" it, and then it lost any importance. This is not criticism, I would actually love such a protocol that really works. It would be a bit similar (regarding its goal to be a "less volatile Top88") to my idea of a DLC (Discreet Log Contract) following a Top88 moving average (post is in German but I'm sure it can be easily translated today), but much less complicated.