In Maker DAOs case a CDP seems to be a type of bet that the value of ETH is going to increase. How long can Maker DAO survive in a declining market before it no longer is attractive for issuers to participate? I mean what makes locking an asset into a CDP more attractive than using it to trade options on an exchange? Traders have all these strategies for loss mitigation. Does a CDP allow you to purchase an asset as it rises in value and execute a stop loss as soon as it falls in value? I don’t think so.
If not, then in what way could a CDP ever be a better type of investment than an automated trading strategy? At least with a trading strategy you can limit your risk and maximize your upside with order limits, stop loss, and various other advanced trading techniques.