Goosie changes the rules for De-Fi. Here are some genuine FAQs I am getting as I share the protocol with others. If you have a particular question not covered please contact me.
License: details in these FAQs are open source licensed under the rules of the goosie club. Any deployment of the novel and commercially useful features outside of club rules is considered a trespass. Please read the license carefully in order to avoid any future misunderstanding.
Is goosie a platform that allows me preserve the current market value of the deposited crypto in exchange for minted goosies?
- You mint your own goosie based on the value of the collateral deposited in the smart contract. In other words you make a loan to yourself that gives you instant liquidity. Because goosie coins are pegged to the US dollar, if the value of your collateral (e.g. BTC) falls, you have already secured a portion of the purchase value with the goosie minted - that portion of your asset purchase has become risk free.
If market value increases more goosies are minted but if the crypto declines the goosie value is pegged against the original crypto value, is that correct?
- Yes. If the market value of the collateral increases more liquidity is available. All you need to do is to un-lock your coins by burning goosie and re-depositing them. The smart contract will then mint you new goosie based on the increase in the value of your collateral.
How are there no margin calls? How are "goosie" pegged to USD?
There are no margin calls because goosie are loans you make to yourself. Why would you ask for more collateral from yourself? Why would you liquidate your loan when your collateral was down so you took a hefty loss?
If the value of your collateral falls below 100% one might expect a need for a margin call in order to maintain the peg of goosie to the US dollar. In derivative products such as EFT’s full collateralisation is necessary because the EFT derives its value from the underlying assets. However for goosie this is not necessary.
Users believe the collateral they post is an appreciating asset otherwise they would not have bought it in the first place. In other words when they post collateral they fully expect to want to get their collateral back.
To release their collateral they need to burn the same assumed US dollar value of goosie they initially receive as the self-loan. This incentivises them to spend their new-mint goosie at the pegged price. To do otherwise represents a self-imposed cost on their self-loan.
When new goosie are minted this message appears:
Remember, spending your new-minted goosie below the 1 goosie = 1 US dollar peg costs you money when you come to unlock your collateral. For example, if you mint $100 worth of goosie and you spend it at 80 cents per goosie you spend $80. But when you unlock your collateral you have to pay back $100 worth of goosie. In this case spending below the peg has cost you $20.
Goosie thus enter the market at the pegged value. The smart contract collateral is released at the same assumed US dollar value. In other words, from inception to collateral withdrawal there is no incentive to sell goosie below the pegged price.
I’m assuming the goosies are a tangible digital currency, or do I need to change them into Fiat if I want to buy a 160k vehicle for example.
- Yes, goosie are a tangible digital currency. Their value is pegged to the US dollar. You will be able to spend them, trade them on crypto exchanges or convert them to fiat.
Whom stands the losses if the Crypto market crashes, it there is 100 million dollars of crypto invested in goosies and the market crashes by 40%?
- In this scenario your crypto has gone down 40% but you still own the goosies you have minted against it. They have not gone down because they are pegged to the USD. So you still have money to spend in the down periods. (This solves a key problem for my wife and I, liquidity in down markets.)
Your messing with my brain, I was always of the assumption that what goes up must come down and somebody has to pay back the defecit.
- One way to look at it is that you run a deficit as the value of your collateral falls. This is shown by the fact that to release your collateral you need to burn the dollar value of the goosie that have been issued against it. So if you did this when your collateral was down you would realise the full loss. However, as there is no margin call on what is a self-loan, you don't have to do this. Instead you can ride out the price drop of your collateral with the goosie already minted until the asset value recovers.