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Fake Tesla, Apple stocks have started trading on blockchains

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Re: Fake Tesla, Apple stocks have started trading on blockchains

#211

Post by kqr »

ButtSpark69 wrote: post #202
quickthrowman wrote: post #100

Earlier quoted context omitted.

> We don't call corn futures fake corn /ZC is physically settled[0], so that’s not a great example. /ES (S&P 500) or other index futures that are cash-settled is a better analogy. They’re also, yknow, regulated[1]. [0] https://www.cmegroup.com/markets/agriculture/oilseeds/corn.c... [1] https://www.cftc.gov/

But most things of this type specifically arent settled, they're settled in cash and rolled over, again and again and again, forever. Look at the volumes traded for these derivatives, numbers are insanely high. People don't mostly use them to do what they were intended (hedge a poor rain year or similar), but to GAMBLE. The rest is mostly just narrative.

Saying that they were intended for hedging sounds like a very strong proposition to me. Chicago-style futures have (and have had, for as long as we know) numerous features that indicate speculation (or gambling, as it's also known) as one of their big reasons for existence.

They are also used to sell unconventional services (being long corn in August and short corn in July is effectively selling the service of transporting corn back in time) and,

perhaps most importantly, to make commodity loans (being long corn in the cash market and short corn in the futures market is a loan of corn.) This helps explain why, after removing costs of storage and insurance and such, prices are almost always in backwardation.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#212

Post by minitoar »

smabie wrote: post #153
minitoar wrote: post #142

Earlier quoted context omitted.

Because there's some mechanism for arbitrage that allows you to effectively settle it. If the spot price is too low you can make a profit.

Well that mechanism for arbtrage usually occurs through settlement. ie at contract settlement, you trade one for the other.

Right, in lieu of that these schemes use a variety of different mechanisms. One way is you can mint the derived asset at a price oracle by staking other tokens. If the synthetic spot price is too high, you can sell your newly minted asset for more than you staked. If it’s too low, you can mint an inverse asset and sell that for more than you staked.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#213

Post by caf »

cesarb wrote: post #161

> But to stop mirrored stocks and other synthetic assets from trading, you would have to shut down the underlying open-source software code that makes up the blockchain and is used by a global user base that includes many anonymous players, he added. Don't these synthetic assets need an oracle to inject the price of the real assets into the blockchain? To stop these synthetic assets from working, couldn't they just g…

It seems like you wouldn't need an oracle if you created a mirror token in the same way USDT (supposedly) mirrors USD - issue one SynTSLA token in exchange for one actual TSLA stock certificate, and promise to redeem them 1:1 as well.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#214

Post by dkshdkjshdk »

rank0 wrote: post #127
meowkit wrote: post #105

Earlier quoted context omitted.

Either you’re being intentionally obtuse or don’t know what Uniswap is. Decentralized, automatic trading that can route liquidity for direct asset swapping does not exist in traditional finance for retail investors.

If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional finance system. Yes it’s far easier for retail investors to play the role of the market maker but the financial services themselves are the same. Also realize that if defi becomes mainstream retail will still be pushed out by institutions as yields approach zero.…

> If you take away all the buzzwords you’ll notice that the core utility of uniswap is the “decentralization” of services which are offered by the traditional finance system.

If I contact my bank, will they allow me to become a liquidity provider for USD-EUR pair and give me a cut of USD-EUR exchanges that they make? If not, which traditional financial institution do I have to contact for this?

Actually, I would be ok if you could point me to a bank that provides positive yield (or at least nonnegative yield) if I deposit my money there. Is there a traditional financial institution that can provide me with some sort of working "savings" solution... If there is, please let me know, because I'm looking for one.

The way I see it, entities like Uniswap/AAVE/etc. are surely emulating aspects of the traditional finance system, but are not exactly redundant. Perhaps if banks start offering positive interest rates on deposits (not even above inflation... just positive), I'll change my mind.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#215

Post by grey-area »

anm89 wrote: post #90

Fake seems like a strange choice of words here. These things arent attempting to deceive anyone into believing they are the real thing. They clearly label themselves as derivatives. We don't call corn futures fake corn, we don't call derivatives of other types fake those things and we shouldn't call these fake stocks. I'm really not defending or not defending whatever these platforms are. I wouldn't be surprised if t…

Unregulated would be a better description. This is a perfect example of the kind of financial asset that should be heavily regulated.

How do these assets track the price and what guarantees they will always do so? If the answer is trust us (like stablecoins, nfts, etc), people buying them are marks, not customers.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#216

Post by shkkmo »

Anytime I see a DeFi proponent saying something like this:

> is so powerful in unlocking financial services for disenfranchised people around the world

What I hear is "we have a new way to trick the unsavy and take all their money."

Without any actual connection to divedends / voting rights / IPOs, all the traditional excuses of stock trading vanish and you are left with straight-up gambling.

The guy quoted isn't the Robin Hood, he's the Sheriff of Nottingham stealing from the poor.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#217

Post by dkshdkjshdk »

gpt5 wrote: post #159

> the idea is to keep prices of the synthetic -- or “mirrored” -- equities in the ballpark of the real thing by offering incentives for traders to arbitrage price discrepancies and manage the actual supply of tokens. Users can create, or “mint,” new tokens when prices are too high by posting collateral, and destroy, or “burn,” tokens when prices are too low, driving the price up or down. How does that work? What prev…

> “mint,” new tokens when prices are too high by posting collateral

You can "run away", but the collateral stays.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#218

Post by joosters »

User23 wrote: post #176
as_i_fall wrote: post #117

Earlier quoted context omitted.

Are these assets backed by legally binding contracts? If the answer is no it doesn't seem like a stretch. If I sold you a stock in my company that gave you none of the traditional shareholder rights I'd also call those shares "fake", which seems to be what's going on here.

That’s what GOOG is (as opposed to the “real” Alphabet stock GOOGL). So by your definition one of the FAANGs is issuing “fake” stock. And for some reason it trades higher than the “real” shares.

Owning GOOG still gives you a real 'share' in the company, i.e. if the company was wound up and all its assets sold off, you would get paid in proportion to the amount of GOOG you owned. Whereas you would get no such thing with these fake stocks.

Re: Fake Tesla, Apple stocks have started trading on blockchains

#219

Post by dkshdkjshdk »

arcticbull wrote: post #46
mrkramer wrote: post #25

Earlier quoted context omitted.

I agree with you on Webvan but Theranos was pure fraud. The so called "Crypto" industry will mature when regulation happens and when real cryptographers and real computer scientists enter the scene and start innovating. Until then we have hyped up teens playing with the buzzwords like blockchain and decentralized finance. >The size and scope of the scams currently going on in the Blockchain world is far worse than wh…

It's been almost 14 years, so where are the "real cryptographers" and "real computer scientists?" I suspect they've been searching and realized there's no "there" there.

Maybe you can find some here: https://scholar.google.com/scholar?&q=zksnark

Re: Fake Tesla, Apple stocks have started trading on blockchains

#220

Post by grey-area »

davidkohcw wrote: post #208
delusional wrote: post #26

How does this make sense? If they don't hold the underlying security, where does the value come from? This feel like it's another one of those "while money is flowing in it'll work, but if there's a run, it crashes spectacularly". If the liquidity dries up, i end up owning nothing. With a real security at least i end up owning a small part of apple, but here i literally own nothing.

It's a synthetic stock which is overcollateralized by stablecoins. So for example, if $100 dollars worth of the stock is issued, someone else had to lock up $150 dollars worth of USD to issue it. And when the price rises (and hence collateralization ratio drops), the issuer has to constantly top up collateral or run the risk of them being liquidated. How do they get price to track the real stock? By simple incentives…

Oh you mean it is backed by those unaudited, unregulated, unredeemable opaque tokens like USDT which are also a scam.

What could possibly go wrong!

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