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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

#241

Post by mypastself »

grey-area wrote: post #220
davidkohcw wrote: post #208

Earlier quoted context omitted.

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!

Perhaps you were responding to the wrong comment, but the parent was referring to a different mechanism from what USDT uses, more akin to MakerDAO. You can be skeptical of that approach as well (I am), but there’s a notable difference in implementation and collateralization ratios.

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

#242

Post by hef19898 »

ique wrote: post #204
danielmarkbruce wrote: post #169

Earlier quoted context omitted.

Isn't it also weird that crypto enthusiasts assume that you obviously can't trust a central clearing house (or similar mechanism) when they have been working well for hundreds of years? In numerous cases humans trust institutions for certain things, and those institutions are usually strongly incentivized to act honorably, and do so. And when they don't, the court system works pretty well. At least in the countries w…

Trusting facebook as the central clearing house for all of our personal data doesn’t seem to have worked out very well.

Let's call it regulated clearing houses then.

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

#244

Post by liaukovv »

carlsborg wrote: post #226
danielmarkbruce wrote: post #169

Earlier quoted context omitted.

Isn't it also weird that crypto enthusiasts assume that you obviously can't trust a central clearing house (or similar mechanism) when they have been working well for hundreds of years? In numerous cases humans trust institutions for certain things, and those institutions are usually strongly incentivized to act honorably, and do so. And when they don't, the court system works pretty well. At least in the countries w…

Neither of the two hold water if you look at how Chinese institutions dealt with the Ant IPO and recently the Didi fiasco and probably many more if you look.

That seems to be an issue with chinese institutions, not with concept of trust in general.

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

#245

Post by 0x008 »

ethn wrote: post #21

I think this is illegal. This is effectively a CFD, which are absolutely illegal in the US regulated or not. https://en.m.wikipedia.org/wiki/Contract_for_difference

Well they are legal in most other parts of the world, so what does that tell us? Is a block chain a national thing?

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

#246

Post by 0x008 »

quickthrowman wrote: post #100
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…

> 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/

Well Futures might be, but every year also the established financial players on the mainstream financial markets invent new derivatives and they all are not regulated until they are.

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

#247

Post by hef19898 »

runeks wrote: post #201
Animats wrote: post #186

The basic idea is that bets are collateralized at a level of 150% of the starting price. If you buy a synthetic stock when it's at 100, and it goes above 150, your bet is cashed out at that point. As usual, the big question is, what's the collateral? In this case it's their very own private stablecoin, Terra, which pays an annual percentage rate of 17%. That, in turn, is being paid by people who are borrowing that st…

This should not be legal. It’s not okay to conjure up some arbitrary scheme, consisting of five different cryptocurrencies, and sell the instrument as though it will always track the price of some stock. It’s not okay to say “well, we thought it would work” when the system crashes. This should be considered as negligence (in properly ensuring that your system will work as advertised before selling to consumers) by th…

This is causing flashbacks to CDOs from back in 2005-8.

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

#248

Post by delaaxe »

danielmarkbruce wrote: post #169
lilyball wrote: post #165

> Users can trade the tokens anonymously 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system. I find it really weird how crypto folks keep pretending that financial regulation is an obviously bad thing, as opposed to restrictions put in place in response to real problems

Isn't it also weird that crypto enthusiasts assume that you obviously can't trust a central clearing house (or similar mechanism) when they have been working well for hundreds of years? In numerous cases humans trust institutions for certain things, and those institutions are usually strongly incentivized to act honorably, and do so. And when they don't, the court system works pretty well. At least in the countries w…

No one would want to use a clearing system if it was possible to do without. Now it is.

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

#249

Post by Kathula »

danielmarkbruce wrote: post #169
lilyball wrote: post #165

> Users can trade the tokens anonymously 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system. I find it really weird how crypto folks keep pretending that financial regulation is an obviously bad thing, as opposed to restrictions put in place in response to real problems

Isn't it also weird that crypto enthusiasts assume that you obviously can't trust a central clearing house (or similar mechanism) when they have been working well for hundreds of years? In numerous cases humans trust institutions for certain things, and those institutions are usually strongly incentivized to act honorably, and do so. And when they don't, the court system works pretty well. At least in the countries w…

This obviously doesn't hold up if we look at the original purpose of the blockchain, ie Bitcoin, to avoid issuers of money to debase said money. Which has in fact happened thousands of times through out history and keeps happening to this very minute.

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

#250

Post by lottin »

mmiliauskas wrote: post #167
lilyball wrote: post #165

> Users can trade the tokens anonymously 24 hours a day, seven days a week, from anywhere, unhindered by capital controls, “know your client” rules imposed on broker-dealers, and other frictions of the traditional financial system. I find it really weird how crypto folks keep pretending that financial regulation is an obviously bad thing, as opposed to restrictions put in place in response to real problems

Not that it is bad, just useless, money always find the way around them.

No, it doesn't. Obviously you don't have a clue about financial regulation.
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