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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

#371

Post by graeme »

spiralx wrote: post #286
graeme wrote: post #183

Earlier quoted context omitted.

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

Because market cap is nonsense, if I create FooCoin with 1,000,000 tokens and sell one for $250, it has a market cap of $250M despite only ever having $250 in real money involved.

I know market cap isn’t sensible for coins with varying values, but for stablecoins equal to $1 market cap is supposed to be the number of tokens in circulation and therefore should be close to reserves.

Number of reserves is its own issue but only having 0.1% reserves is miniscule.

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

#372

Post by School-Cotton »

UIGYUIUYG wrote: post #272
pavel_lishin wrote: post #187

Earlier quoted context omitted.

Do people who had SafeDollar have control over their own money? Did the people whose money got locked in the DAO because of a software bug have control over their own money? > How about if I transact only in crypto (Monolith card), now every purchase I make is via crypto Do you in fact do this? > nothing different to using a bank card with US dollars backing it There certainly is if you read Monolith's fine print, an…

> Do people who had SafeDollar have control over their own money? Did the people whose money got locked in the DAO because of a software bug have control over their own money? Nope, because they didn't do their due diligence. Do you deposit your savings to a new bank that's not had a single audit done? Are there any specific banks that you won't do business with? It's the exact same in the crypto sphere. > Do you in…

> Do you deposit your savings to a new bank that's not had a single audit done?

Sure, because banks in my country are regulated, and deposits are insured, so I trust literally any bank.

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

#373

Post by neoromantique »

salt-thrower wrote: post #354
__s wrote: post #346

Earlier quoted context omitted.

VCs blowing an order of magnitude more on coke doesn't make the news

A VC publicly saying "I don't spend money on coke" as a marketing tactic and then getting busted doing just that would make the news. Much like a coin that claims "this coin is stable and its value is tied to USD" getting looted and crashing to $0 also makes the news.

Me shouting "I'm a VC and I don't spend money on coke" and then getting busted doing just that would not make news, as I'm nobody. Same here.

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

#374

Post by krrishd »

omk wrote: post #209
krrishd wrote: post #94

Earlier quoted context omitted.

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 requiremen…

I agree that it isn't a zero sum game and that there are valid use cases. But I don't see any of these use cases operating over a multi-million dollar business. There has to be a way to override an exploit when a sum like that is at stake.

Not to suggest that this is the best way to do it, but that’s already happened on Ethereum: https://en.wikipedia.org/wiki/The_DAO_(organization)

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

#375

Post by notJim »

DanHulton wrote: post #296
Retric wrote: post #253

Earlier quoted context omitted.

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.

Yeah, the classic example is the original binary search algorithm. It had an overflow bug that went undetected for two decades: https://thebittheories.com/the-curious-case-of-binary-search... It's an incredibly simple algorithm and still got missed. Smart contracts have no chance.

How often was that bug actually hit in production? How many people are allocating arrays of size 2*31? A bug is less likely to be caught if it's not exploitable.

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

#376

Post by fleddr »

mike00632 wrote: post #369
fleddr wrote: post #356

Earlier quoted context omitted.

Your statement "how hard is this" shows your complete incompetence regarding the backing of anything. Nothing of value is backed in our world. If a mere 7% of bank account holders go to the bank to collect their money, the bank collapses. They don't have your money, it's not there. If all owners of gold (gold value papers) today claim their physical gold, it can't be done. There's 400% more value paper compared to th…

The difference is that Apple doesn't claim to have a 1:1 reserve of dollars to back the value of their stock. It should matter to you that the USDT folks are lying (over something important).

We're in agreement that lying about backing is wrong in any case, no argument there.

I in particular object to the notion that things of value should be 100% backed by actual USD, in bank accounts or cash. That's not how liquidity works, yet a lot of people intuitively believe this to be so.

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

#377

Post by dasudasu »

vimy wrote: post #235
iNane9000 wrote: post #140

Earlier quoted context omitted.

It’s more regulated though. That’s the point is there’s some control in usd, for better and worse.

Cash is the ultimate anonymous method of payment.

Not necessarily. Bills have serial numbers on them. They can also be marked.

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

#378

Post by WalterSear »

HugoDaniel wrote: post #147
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?

Immutability is at the heart of blockchain functionality. Everything involved requires it. So, you'ld have to throw it all out and try to invent something entirely different.

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

#379

Post by School-Cotton »

dcolkitt wrote: post #185
tptacek wrote: post #130

Earlier quoted context omitted.

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…

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…

> If you have a 401k I guarantee you that a significant amount of your money was traded by an algorithm that if broken would have lost everything

How so? My 401k is invested in a fund that just owns a broad index of stocks, not an algorithmic trading hedge fund.

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

#380

Post by School-Cotton »

remolacha wrote: post #248
holoduke wrote: post #217

Earlier quoted context omitted.

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.

Yes and if any of those make mistakes, the trades can be rolled back with human intervention.
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