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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

#241

Post by [deleted] »

8note wrote: post #173
derefr wrote: post #80

Earlier quoted context omitted.

> 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…

The defacto state of nature is reversible transactions. Unless the things have been destroyed, the trade can be undone

[deleted]

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

#242

Post by rawtxapp »

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.

The flip side of that is any smart contract that stood the test of time should be rock solid. For example, there are huge incentives to go ahead and hack a big contract like maker, compound, uniswap or aave, so you can bet that there's highly qualified people out there trying to hack them as we speak, yet after all this time, they are still working as intended.

I have a lot more trust in that kind of product than in a product where contracts are subject to interpretations by humans which may or may not be reliable. It's one of the reasons why people incorporate their companies in Delaware, there are well known case law, so you know in advance what to expect from the justice system. Predictability is an important part of a contract, I trust a well inspected and battle tested smart contract much more than a human enforced contract. That said, not everything is suited to smart contracts, but many financial applications are.

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

#243

Post by kybernetikos »

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…

These topics are orthogonal to the technology. It's perfectly possible to create tokens using smart contracts on the ethereum blockchain that have keys that can reverse transactions. I deployed a simple one to a testnet a while back as a proof of concept for a bank (any time an enforcement action was taken, a reason had to be provided, and it was broadcast as an event).

And just because you're using a smart contract, doesn't mean that the legal system of the jurisdiction you're in no longer has an opinion or the ability to make judgements against you.

So, I agree, some of these things are features not bugs to normal humans, but to most cryptocurrency enthusiasts they are anathema. Ultimately we'll need systems that are a bit more friendly to error. It's early days though, and the technology is flexible enough to incorporate nearly any kind of system you want.

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

#244

Post by chrisco255 »

graeme wrote: post #183
Jhsto wrote: post #168

Earlier quoted context omitted.

Despite the low liquidity on the exchange, the market cap of the token was supposedly $250M: https://twitter.com/Mudit__Gupta/status/1409463917290557440?...

How did they have a marketcap of $250M as a stablecoin when they had 1000x less in reserves?

Sounds like a statistical fluke to me (or some kind of market cap manipulation scheme). This token was not that liquid and not that widespread at all. I never heard of this token until today and I spend several hours a day on crypto.

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

#245

Post by raesene9 »

lazzlazzlazz wrote: post #164

There are more than $100b of stablecoins — 285x year-over-year growth — with a variety of very interesting and high-quality stablecoins proliferating. And of course, Hacker News focuses on some garbage project nobody in the space even followed. How is there no discussion about FRAX, Maker's DAI, USDC, CRV's 3pool token, Liquity's LUSD, and so many other interesting projects?

The largest stablecoin by Market cap, Tether, has been discussed on here, quite a few times.

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

#248

Post by remolacha »

holoduke wrote: post #217
dcolkitt wrote: post #185

Earlier quoted context omitted.

You are aware that the vast majority of financial market trading is run by algorithms that govern not advise vast amounts of capital in an irreversible way. Sometime these algorithms break or are exploited. Often in spectacular disasters. Knight lost half a billion dollars in 30 seconds. Nobody reversed though, even though it was clear error. If you have a 401k I guarantee you that a significant amount of your money…

The world is more than just automated trading systems

The matching engine on the exchange is also automated. The settlement system is electronic. Etc. etc.

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

#249

Post by kybernetikos »

res0nat0r wrote: post #223
UIGYUIUYG wrote: post #202

Earlier quoted context omitted.

Then don't put your money in a newly created contract? You yourself say you keep it in a Chase bank account, you sure as hell wouldn't put your life savings in a newly created bank and trust everything to them would you? Look at what you put your money into, has it had any audits done (this applies to both tax / financial audits for brick and morter stores, and code audits to smart contracts). I will never ever inves…

I'll take an FDIC insured bank over some new cool crypto project any day of the week.

That's different, that's because you trust the insurance. If you had insurance you trusted for the new cool crypto project, you might feel differently.

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

#250

Post by ma2rten »

ConcernedCoder wrote: post #229
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.

Can there ever be 'bug free' software? As a lifelong programmer, I'm starting to think that it's impossible to write perfect software free from bugs.

I thought that was conventional wisdom.
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