Original of Matthew's twitter thread can be read here
https://twitter.com/MatthewPlomin/status/1524253783861174274?t=PQCsgkO4PRv46YZ3bLEeag&s=19
It's well written and great bit of research , however there were some errors which I attempt to correct below.
The more people who being to look into Djed / Shen and start to come up with differing ways to pick holes in the protocol the better in my opinion.
Error in 4
The only difference isn't that the Djed cushion is bigger ,
it's also that the burning/Minting of Shen can be stopped if the ratio goes too far out.
UST had to sell BTC (part of there backing reserve) which is open to everyone and rumor has it BlackRock sold first and shorted knowing that Do-Kwon would also have to sell to keep the peg.
No one party can short Shen like this. (as burning/selling of Shen would be blocked)
EDIT - Clarification as I guess you might be able to short it from the 8:1 ratio down to 4:1 but still the peg should be held
Mistake in 5.
The ratio starts at 4:1 and will go all the way to 8:1
he seems to think that we attempt to keep a hard 4:1 ratio
11. not a mistake but an assumption.
Firstly we don't know what the fees will be.
and secondly COTI treasury user don't get "fees" as such they get the operating expenses which are added in.
However operating expenses could just be called fees by a different name.
If you have ever used the treasury you'll see 2 fee structures one for the other treasury users and one for the node runners.
think of Djed fees like that.
See fees image
13. again 400% is the minimum buffer.
it goes up to 800% which should be enough in virtually all circumstances.
Main take-away
Could ADA drop enough to cause an issue = yes
is it likely = no
More about this ("is it likely question at a later date")