Some DeFI protocols, such as Aave or MakerDAO, have their token (AAVE and MKR) as a basis of their security model.
Example: if something goes bad with MakerDAO (i.e., unbacked DAIs are generated), some MKR will be minted and sold in the market to compensate for the loss. → This of course dilutes existing MKR hodlers.
The problem with this model, as experienced during Black-Thursday in 2020, is that when “something goes wrong”, the token price collapses. During B.T., MakerDAO had ~12m DAIs unbacked, but the MKR price collapsed from 600usd to 200usd in a few hours (a 400m markepcap drop caused by just 12m!).
QUESTION: I wonder if Perpetual could (eventually) design some security/insurance mechanisms to help these organisations.
What I am thinking is basically a well-managed short position (on MKR, for example), that acts as insurance. There are other platform developing call/put Options, but perhaps something simpler is possible in Perpetual?
I am not sufficiently educated in derivatives/finance to make a detailed proposal, but I feel there is the potential here at Perpetual Protocol. If well-executed, it would be a big hit with many customers: AAVE, MKR, etc.