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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

#141

Post by thebean11 »

jvanderbot wrote: post #99
drcross wrote: post #82

Earlier quoted context omitted.

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.

> Those same folks cannot carry around a crypto-buck either.

Many of them can. Smartphones have much higher adoption than credit cards in these areas.

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

#142

Post by sneak »

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…

> Legal contracts do not work like a software program and that characteristic is a feature not a bug.

Not everyone agrees with that. Everyone using smart contracts is opting in to code-as-law - nobody who doesn't want that needs to use or touch them.

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

#143

Post by jvanderbot »

CydeWeys wrote: post #135
jvanderbot wrote: post #99

Earlier quoted context omitted.

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.

> This argument does not help. Those same folks cannot carry around a crypto-buck either I'm not a big DeFi booster, but I don't think that's true. All it takes is a mobile phone. There's some pretty compelling videos coming out of El Salvador showing just how easy it is to instantly transact Bitcoin between two people simply by scanning a QR code on the other person's phone and then sending a Lightning Network trans…

You'd have to ignore the rest of the comment to honestly think this is a reply to the point OP was making and I was clarifying.

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

#144

Post by twic »

dcolkitt wrote: post #113
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…

Much of the world literally does run algorithmically. Literally every day you trust your life, privacy and money to algorithms that make decisions without human intervention. The financial system trades trillions of dollars in automated systems that make split-second decisions in a way that precludes human supervision. Hedge funds and banks already trust algorithms that if broken could lose billions. The existence of…

> The financial system trades trillions of dollars in automated systems that make split-second decisions in a way that precludes human supervision.

Nope. Regulations require human supervision, in some way, of that trading.

Furthermore, those trades have exactly the kind of non-algorithmic softness that omk talks about: if an algorithm makes a trade which is obviously incorrect, you can ask the exchange to bust it.

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

#145

Post by thaumasiotes »

tptacek wrote: post #130
dcolkitt wrote: post #113

Earlier quoted context omitted.

Much of the world literally does run algorithmically. Literally every day you trust your life, privacy and money to algorithms that make decisions without human intervention. The financial system trades trillions of dollars in automated systems that make split-second decisions in a way that precludes human supervision. Hedge funds and banks already trust algorithms that if broken could lose billions. The existence of…

It literally does not. The world runs advised by algorithms, but not governed by them. It's a fundamental difference. When algorithms in the real world create lose-lose outcomes, people override them, which is why when your credit card gets stolen you don't end up paying for stuff. You can bake that logic into a software contract, but if the design of your system is that the totality of software contracts are the fin…

> When algorithms in the real world create lose-lose outcomes, people override them, which is why when your credit card gets stolen you don't end up paying for stuff.

An exploit where I take all your bitcoins isn't a lose-lose outcome, and neither is that. If I steal your credit card and you have to pay for my stuff, you're the only party who loses.

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

#146

Post by res0nat0r »

derefr wrote: post #80
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…

> that the world does not run algorithmically Sure it does: moving gold and commodities between countries in non-mutually-friendly regimes, very much resembles crypto. Fiat finance is a system of contract law built on top of a de-facto "state of nature" of irreversible no-arbitrator commodity transfers. It exists in places where people can agree on who the arbitrating party should be. It does not exist outside of tho…

At least to me, and possibly others, any system which I have my money invested and I can lose everything I own with no recourse due to some exploit is completely laughable and something I will never ever touch. There's a reason folks keep their life savings in a Chase bank account, because if something like this happens you have recourse to recover your money.

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

#147

Post by HugoDaniel »

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.

Would an "upgradeable" crypto-coin solve that flaw?

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

#148

Post by jvanderbot »

thebean11 wrote: post #141
jvanderbot wrote: post #99

Earlier quoted context omitted.

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.

> Those same folks cannot carry around a crypto-buck either. Many of them can. Smartphones have much higher adoption than credit cards in these areas.

> 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

#149

Post by orthecreedence »

dcolkitt wrote: post #113
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…

Much of the world literally does run algorithmically. Literally every day you trust your life, privacy and money to algorithms that make decisions without human intervention. The financial system trades trillions of dollars in automated systems that make split-second decisions in a way that precludes human supervision. Hedge funds and banks already trust algorithms that if broken could lose billions. The existence of…

I'd say most of the systems you mention either a) have human failsafes b) have years of pre-algorithmic precedent such that the algorithm matches some well-known accepted process or c) are speculative in nature and therefor can assume the risk of a faulty algorithm.

Algorithmic stablecoins are mostly in category "c" so far. There is no human failsafe and there is no predetermined process that can shape the algorithm.

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

#150

Post by bopbeepboop »

Barrin92 wrote: post #92
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.

One interpretation would be that they view the risk of poor transactions as less than the misdeeds of the current system.

Eg, fiduciaries who structure transactions to reap fees, like Bank of America, or places like Comcast who routinely mischarge.

I’d be curious to see a study on bank fee abuses or rental scams and how much the public loses each year to racketeering by entrenched players.

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