SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon • Hacker News Board

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

#261

Post by rawtxapp » Mon, Jun 28, 2021, 7:22 PM UTC

Retric wrote: post #253

rawtxapp wrote: post #242

Earlier quoted context omitted.

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…

How many major bugs in software and especially cryptosystems went undisclosed for decades? The core issue is the inherent asymmetry where 1 person finding 1 bug can destabilize giant systems. Even if these systems where hundreds of years old that doesn’t actually mean much.

How many bugs had a direct financial return in the same way? If you found a bug in maker (or any of the other big contracts) today, you can walk away with billions of dollars worth of coins, that's a huge sum.

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

#262

Post by lisper » Mon, Jun 28, 2021, 7:22 PM UTC

whatshisface wrote: post #230

progbits wrote: post #59

Earlier quoted context omitted.

Time for LawyerCoin (TM). The smart-contract is written in English (or other human language) and the oracles are powered by a bunch of lawyers who pinky swear to enforce them. I'm doing ICO next week, if anyone wants in.

We can do better than pinky swearing. Each lawyer gets mining fees when they enforce a contract fairly. "Fairly" is defined by consensus, where each lawyer is forced to predict the consensus before voting in a private ballot that is only revealed when the rewards are issued. Lawyers who predict the consensus get rewarded. If you start it off with people who are trying to be fair then predicting fairness will lead to…

That's actually a pretty good idea. I had a similar idea to discourage the gaming of upvotes on sites like HN and Reddit: make each upvote cost a point, but then you get a point for everyone who upvotes after you, divided by the number of votes the item had at the time you upvoted (or something like that). So people who upvote popular stories early, i.e. people who successfully predict what people will like, get rewarded.

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

#263

Post by zionic » Mon, Jun 28, 2021, 7:23 PM UTC

chizhik-pyzhik wrote: post #108

The fact that this is trending on HN shows how little hacker news knows about the cryptocurrency space. A relatively unknown, recently launched stablecoin collapsing is not big news in crypto. Now if dai, usdc or usdt had failed, that would be a big deal.

Seriously.

Meanwhile on boomer news

> A single web server caught fire somewhere in Bolivia, is social media over? (+20000 points)

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

#264

Post by rawtxapp » Mon, Jun 28, 2021, 7:23 PM UTC

uncomputation wrote: post #258

rawtxapp wrote: post #242

Earlier quoted context omitted.

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…

Considering there are still new bugs found in chip designs, operating systems, and compilers that have been around 4 times as long as any cryptocurrency I have literally no idea why you would feel safe in “smart contracts.” At least if my bank account is hacked, I have a solid legal standing for compensation and I have good reason to believe centralized financial institutions will keep extensive documentation and log…

The bugs found in smart contracts equal large sums of money right away unlike 0-days in OSes or other systems where the link is much more indirect. For example, if you find a 0-day on Windows, sure you might sell it for 7-8 figures on the black market, if you found a bug on maker (or any of the big contracts), you could walk away with billions of dollars in a practically untraceable way.

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

#265

Post by admax88q » Mon, Jun 28, 2021, 7:23 PM UTC

tylersmith wrote: post #37

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.

Human beings write software that flies people around the world and shuttles people between the Earth and space. Managing money is not more important than many things we use software for.

Surely you see the difference between managing money on the open internet and closed systems such as planes and spaceshipts.

The incentives to break those other pieces of software are different.

Very few people are incentivized to hack planes to crash and kill people. Even fewer are incentivized to hack the space shuttle. Not to mention those pieces are rarely exposed on the public internet, or have connectivity at all.

But massive amounts of nigh-untraceable free money? Ton's of people are incentivized to go for that.

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

#266

Post by snewman » Mon, Jun 28, 2021, 7:23 PM UTC

rawtxapp wrote: post #242

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…

I'm not sure this follows.

It's a fair point that any easy-to-find bugs in large, time-tested contracts will have been found. Any medium- or hard-to-find bugs also will probably have been found. But there might still be a very-hard-to-find bug lurking; and given the value of finding such a bug, people might look hard enough to find it.

In other words, the same scale that ensures there is no low-hanging fruit, also provides the incentive to pick high-hanging fruit.

> 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.

This is a valid concern, but it's also extremely well-understood at this point; we have centuries of global-scale experience with traditional financial and legal systems. They're certainly not flawless, but it's rare for gigantic new flaws to emerge. An important point is the existence of mechanisms for rolling back bad transactions and challenging / appealing flawed decisions.

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

#267

Post by oivey » Mon, Jun 28, 2021, 7:23 PM UTC

jcranmer wrote: post #160

breck wrote: post #98

Earlier quoted context omitted.

> 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*…

> 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. I fail to see how this helps. The reason why bugs crop up all the time in software isn't because syntax is confusing. It's also not because semantics…

Just to add, things like type checking are the comparatively easy part. The world itself and many of our constructs for thinking about it are not well defined. The trouble in reconciling these things are why things like appeals courts exist. Smart contracts built on this ill defined world will always have bugs. The world isn’t going to become significantly more well defined for smart contracts, either. If that were possible, we wouldn’t have those aforementioned higher courts.

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

#268

Post by theli0nheart » Mon, Jun 28, 2021, 7:23 PM UTC

solomonb wrote: post #256

rawtxapp wrote: post #242

Earlier quoted context omitted.

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…

This sounds like a fallacy of the inverse. Those contracts not being hacked yet is no proof that they are resistant to hacks.

It's not clear what fallacy you're thinking about because the fallacy of the inverse is not it.

From https://en.wikipedia.org/wiki/Confusion_of_the_inverse:

> Confusion of the inverse, also called the conditional probability fallacy or the inverse fallacy, is a logical fallacy whereupon a conditional probability is equated with its inverse; that is, given two events A and B, the probability of A happening given that B has happened is assumed to be about the same as the probability of B given A, when there is actually no evidence for this assumption.[1][2] More formally, P(A|B) is assumed to be approximately equal to P(B|A).

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

#269

Post by __MatrixMan__ » Mon, Jun 28, 2021, 7:24 PM UTC

saalweachter wrote: post #212

__MatrixMan__ wrote: post #158

Earlier quoted context omitted.

I dunno, it's not about wealth concentration, be rich, that's fine. It's about whether your wealth was gathered by contributing useful work, or by parasitizing it. I imagine a proof of work system where there's a community work queue, and "mining" is completing tasks in the queue, borderlands-style (though hopefully without the violence). The mined tokens can be resolved to nft's which stay attached to the wallet of…

The difficulty is that once you move from things like my joke solution to earnest attempts like yours you start involving the real world in your model, and you end up with something that is more like a social solution than a technological one. Once you start talking social solutions you start looking more like a business or a commune or a community and less like a technology. You don't just have algorithms and widget…

Oh yeah, it gets messier for sure, and I think that providing the protocols is probably the smaller part of it. Teaching people to use them is probably harder. But the benefits of taking on those challenges strike me as too big to ignore.

As for the botnet thing, I really like how CirclesUBI handles it. "Trust" is a pact to treat tokens minted for the other party as indistinguishable from tokens minted for yourself. So by all means, go simulate a small town doing "useful" work. Nobody is going to value the fruits of that labor unless they've seen them, and so your tokens will be worthless.

Once you have the base web of trust set up, you can layer other types of trust on top of it, like returns-borrowed-tools-undamaged trust and other things that lower the cost of doing business.

It's about using technology to take things that already work (cooperation) and make them work at scale (1000 people instead of 10). No need for global consistency, the resources are all local anyway.

As for being called a commune, that's fine. Communism allegedly doesn't work, so the idea that people might be doing this in tandem with traditional economics ought to be considered "not-a-threat" except in cases where traditional economics produces exceptionally troublesome outcomes.

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

#270

Post by kybernetikos » Mon, Jun 28, 2021, 7:24 PM UTC

remram wrote: post #240

G3rn0ti wrote: post #169

Earlier quoted context omitted.

I think the word „smart contract“ does not actually describe them very good. Of course, a piece of software can not replace a legal contract, really, because software is stupid and inflexible. Think of smart contracts rather as vending machines for financial transactions. For example: You enter some crypto coins, maybe select an option and the machine returns a receipt for redeeming your investment plus some interest…

In a very real way, those contracts are less smart than existing legal contracts. In the same way a "smart speaker" allows for interactive and sensitivity to its environment compared to a "dumb speaker", a "legal contract" allows for arguing and bugfixing and sensitivity to its environment compared to an block chain "contract". They should call them "strict contracts" or "inflexible contracts" or "software-enforced c…

> In a very real way, those contracts are less smart than existing legal contracts.

It's more that they're just entirely separate things. Smart contracts are programmable money. Contracts are agreements between parties. The fact that you can use smart contracts to automatically take actions required by an actual contract is interesting and useful, but it's not enough to make the two comparable.