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SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

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Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#91

Post by toomuchtodo »

drcross wrote: post #82
MattGaiser wrote: post #61

Earlier quoted context omitted.

Indeed. Credit cards are far less decentralized than cash. But because credit cards have an administrator to protect the consumer, they are also preferable to cash.

The majority of people in the world can't get a credit card.

This is true, but with that said 54 countries have instant payments [1] [2]. This number will only grow, as you’re just pushing messages around queues. Once Congress lit a fire under the Fed, it’s only taking ~4-5 years to roll out instant payments in the US. This is very fast for such endeavors.

Your average financial consumer in most countries is going to trust their bank and government to protect their fiat vs cryptopunks, blockchains, “smart contracts”, and “stablecoins”. To compete with fiat, you need to sell trust and recourse, not speed, and that’s something crypto inherently doesn’t support.

(No need to point out Venezuela and the like about where crypto might have a chance, ground truth shows those folks overwhelming used Zelle and clandestine US deposit accounts to circumvent government monetary controls [3] [4])

[1] https://www.moderntreasury.com/journal/real-time-payments-ar...

[2]https://empower1.fisglobal.com/rs/650-KGE-239/images/Report_... (pdf, start at page 30)

[3] https://www.coindesk.com/venezuela-is-a-testing-ground-for-d...

[4] https://mobile.twitter.com/jp_koning/status/1254009112263868...

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#92

Post by Barrin92 »

omk wrote: post #31

A point that most crypto heads miss is that the world does not run algorithmically. Legal contracts do not work like a software program and that characteristic is a feature not a bug. Not being able to reverse transactions that were part of an exploit is in infact a bug. Businesses need that tolerance for error. You need an oracle in your system. The oracle can maintain transparency of the attestations carried out if…

I'm gonna be honest I don't know what the audience is for a product where you risk losing your entire life savings because you typed a wrong word in a smart contract rather than paying a middleman a fraction of a percent.

It's almost like a sort of willful ignorance of division of labour and the concept of pooling risk.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#93

Post by harikb »

derefr wrote: post #46
tumblewit wrote: post #39

Earlier quoted context omitted.

Not really. If owning a coin becomes illegal it can fall below zero where you are paying someone to take your coins. Something similar to oil happened a while ago when storage had become an issue so prices fell below 0$

Oil is physical; it takes up space, and needs special protections to not pollute the container it's stored in. Digital goods, meanwhile, can just be transferred permanently "into the void" (i.e. to an account without an associated key.)

This implies there isn’t any contract obligations/fine print at the point of link to real world / real identity (exchange).

In a hypothetical world, if coinbase made you sign things at signup and later demanded money for the upkeep of the network caused by your own transactions, I don’t think you can say no to that easily.

Compare this to an HOA demanding a $100k payment from each condo owner in the Miami condo repair / collapse story. Now let us assume that condo is worth less than $100k. I don’t think you can just walk away and abandon your condo.

It is not about storage cost and transportation - it is whatever contract you agreed to when taking the investment or liability.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#94

Post by krrishd »

omk wrote: post #31

A point that most crypto heads miss is that the world does not run algorithmically. Legal contracts do not work like a software program and that characteristic is a feature not a bug. Not being able to reverse transactions that were part of an exploit is in infact a bug. Businesses need that tolerance for error. You need an oracle in your system. The oracle can maintain transparency of the attestations carried out if…

I don’t disagree with you, but I think the only fallacy here is that it’s an extremely zero-sum way to look at things.

Are we perhaps better off for many — maybe even all — of our status quo legal contracts not working like software programs? Sure.

Is there a class of legal contracts — either already in existence, or made possible by crypto — that’d make much more sense if ran like software (with different requirements/constraints than the error tolerance you described)? I don’t see why not, and why this would be mutually exclusive with the first premise.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#95

Post by thebean11 »

neals wrote: post #51
thebean11 wrote: post #20

Earlier quoted context omitted.

MakerDAO is not a scam, and the dollar peg survived the last crypto crash so it's pretty "stable".

They had to create USDC to keep it pegged during the crash before that, though. So actually it's USDC that's stable, that makes Maker stable.

Who is "they"? Maker has nothing to do with USDC. USDC is a Coinbase product.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#96

Post by TrainedMonkey »

omk wrote: post #31

A point that most crypto heads miss is that the world does not run algorithmically. Legal contracts do not work like a software program and that characteristic is a feature not a bug. Not being able to reverse transactions that were part of an exploit is in infact a bug. Businesses need that tolerance for error. You need an oracle in your system. The oracle can maintain transparency of the attestations carried out if…

A point that most people miss is that the world is slowly being eaten by algorithms. One example would be trading floors being converter from mosh pits to electronic ledger books. Another example would be slow advent of self driving, sure it's not here yet, but I think we can agree it is possible.

So, is it that much of a stretch to assume that some day a significant fraction of contracts will be more algorithmic? "The best way to predict future is to create it" - unatributed.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#97

Post by TameAntelope »

keymone wrote: post #67
everfree wrote: post #44

Earlier quoted context omitted.

This is uninformed. What do you call USDC, which is directly redeemable for US Dollars by anyone with a Coinbase account? Every USDC is backed by one USD of deposits in a US-based bank. USDC is a stablecoin, and there are plenty of others out there.

redeemable until it's not.

But given the monthly audits conducted, "it's not" is not very likely to happen at all. The auditor would have to be actively lying or misrepresenting for USDC and Gemini both for something like that to happen.

Much more likely a smart contract somewhere fails than USDC/Gemini (the only two I know that do full audits to ensure 1:1 dollar backing, ignoring USDT). There just isn't much risk there, hence there not being much (any) profit trading stablecoin.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#98

Post by breck »

lalaland1125 wrote: post #8

These incidents really illustrate the main flaw of smart contracts: a single bug in your code can lead to incredible losses. I simply don't think it's possible for human beings to write good enough software for smart contracts.

> I simply don't think it's possible for human beings to write good enough software for smart contracts.

I agree, but think it's fixable. I believe we have missed a natural platform in between binary notation and computer languages.

I believe there is a 2-D dimensional binary. Simply using a grid (with an array of cells forming a line, and lines stacked on top of each other—a spreadsheet basically), we can drop *all* syntax characters. The only thing you have is your cells and your semantic words.

Not only does this make tooling and languages much simpler (which will have big network effects), but you gain new fundamental complexity metrics which may turn out to be incredibly important in designing simple, bug free systems.

I personally really like crypto but it's not one of my main interests. I have been working with some folks in the space on using these ideas to build a new type of blockchain from the ground up. I bet that the biggest blockchain in the future will be a higher dimensional one, based on Tree Notation or derivatives of the core ideas.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#99

Post by jvanderbot »

drcross wrote: post #82
MattGaiser wrote: post #61

Earlier quoted context omitted.

Indeed. Credit cards are far less decentralized than cash. But because credit cards have an administrator to protect the consumer, they are also preferable to cash.

The majority of people in the world can't get a credit card.

This argument does not help. Those same folks cannot carry around a crypto-buck either.

There are plenty of mobile-only banking solutions that are widely used in non-western worlds, and that's likely a model for emerging economies. When electronic banking comes, OP is saying that standard banking ("perfected over millenia TM") is honestly quite preferable over algorithmic contracts.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#100

Post by koolba »

viksit wrote: post #77

It feels like the mainstream adoption of tokens is going to need the equivalent of FDIC coverage / credit card transaction dispute systems. Is it theoretically (or in practice) possible to reverse / mitigate these kinds of token transfers? How would we even think about that?

If the contract was “smart” enough you could require an escrow to a third party, but you’re still trusting the contract to be correct.
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