Vitalik Buterin: Mechanism Design Experimentation in Blockchains

Presentation by Vitalik Buterin of the Ethereum Foundation for the Cryptocurrency and Hayek Conference hosted by Coin Center and the Mercatus Center at George Mason University.

[annaefa]

thank you for posting the presentation in open source!

[lalalander]

I think Vitalik is right to point out the mistake in the Algorithmic Trading slide: If actual price > target price, *actual* price should decrease to match the target price. For example, for a stablecoin like DAI, people will be selling/supplying more DAI (you swap your 1 DAI for 1.10 USDC, which you can use to mint more DAI to sell for more USDC).

If actual price < target price, *actual* price should go up. For example, DAI is collateral-backed and buying DAI below mark would mean closing the loan at a discount. As more people demand the good, the price of DAI goes back up.