Over the past few years, Coinbase has had a way of making business decisions that greatly cater to the Ethereum blockchain, and for obvious reasons. Coinbase is a bank and Ethereum's niche is clearly decentralized finance. Coinbase obviously has a lot at stake when it comes to Ethereum. They even listed a bunch of ERC-20 tokens and ETC before listing XRP (#3 market cap).

https://www.livebitcoinnews.com/coinbase-allows-merchants-to-accept-dai-as-a-means-of-payment/

And they're at it again!

This week, the company announced that it had integrated Dai – a cryptocurrency released by Maker DAO – into its Coinbase Commerce retail merchants’ division, so that stores and similar business establishments could accept Dai in the future as payment for goods and services. Companies on platforms like Shopify and WooCommerce are now eligible to exchange items for Dai units.

This is a pretty big deal because Coinbase (Goldman-Sachs) already has their own stable coin USDC. The fact that they are also willing to use a more decentralized stable coin is very bullish indeed.

Dai is just a really cool amazing coin. Anyone with Ethereum can 'simply' create Dai 'out of thin air' using collateral that they were going to hold anyway.

Thought experiment

Imagine walking into a store wanting to buy something, then opening your own line of credit to do so. MakerDAO and Dai make this a feasible reality. It allows users to not only spend crypto on goods/services, but also allows users to continue holding on to all of their crypto at the same time.

I've spoken to this before, but financially savvy Ethereum users are going to have it so easy going forward. As long as they don't overextend themselves during hyper-bullish bubbles and manage to keep their collateral at strong percentages, it's hard to imagine what could go wrong.

I've spoken to this before, but imagine wanting to buy a computer. Let's say you have $10k Ethereum collateral just sitting around and you decide to loan yourself $2000 to buy a computer. Let's assume by the time you need another computer five years will have pasted.

In 5 years, how much is that Ethereum collateral going to be worth? It could easily go x10. This puts us in a position where we can pay back our loans and have enough collateral leftover to buy another computer (and maybe even a car on top of that). While the value and size of these networks is expanding exponentially, we see that a small lump-sum investment could lead to a situation where we can continue to replace our old tech with new tech without actually having to work a job to do so.

This is actually how the economy should already work, but central banks have been milking the poor for over a hundred years by counterfeiting currency and stealing from the general population. It's been happening for so long that average people don't even understand what's going on and think it's normal.

By exiting that corrupt system and entering this new one where governments can't create inflation on a whim, we see that value can be generated simply by holding on to the currency itself, rather having to scramble to another asset that will store the value.

What if Ethereum stops making exponential gains?

I highly doubt that. Imagine Ethereum 5, 10, and 20 years from now. Every year the number of options available within the network is going to increase. Every year the technology will be developed and used for additional purposes. Assuming the cryptosphere won't continue to make exponential gains is the same and thinking technology won't continue making exponential gains, and that's been happening for quite some time now. Finally, the general public has a way to capture those gains and can't be left out in the cold by strict regulations and high overhead cost investments that require an exploitative loan from a bank.

A more likely worst-case scenario.

What's really going to happen is that people are going to get greedy and stupid AF. Ethereum will bubble 20x at some point and people will look at their collateral like:

Holy shit look at all this money I have I'm going to take out those loans and buy everything.

Then when Ethereum crashes their collateral gets liquidated and they're fucked. Ya flew too close to the sun, Icarus.

The trick will be knowing when to pay off these loans and when to margin trade the market. I personally don't think it will be that hard considering the current doubling trajectory that Bitcoin is on that leads the entire market, but we'll see.

Dai’s integration into Coinbase Commerce means it’s now available to more than four million separate merchants. Coinbase has commented that it struck $135 million in merchant transactions last year, more than 600 percent higher than where this figure stood in 2018.

Sounds like a lot of hype-marketing semi-BS, but I'll take it. Pretty bullish regardless.

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