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“There is a non-zero risk that the peg does not recover to 100%.”
If you’re taking this from their Twitter thread after this whole situation happened, that is definitely not the same thing as an upfront risk factor when collecting investments from people.
Article is from July 2021 (according to Google), updated 7 days ago
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If they’re unlucky they lose $500k, which is nothing. If they’re lucky they get a Coinbase. Why not.
$42 million of real people’s money was lost. That’s a net negative to society whether or not it shows up on a balance sheet.
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A poor decision does not equal fraud.
Promising a guaranteed 15% return is fraud. There is no place in reality where you can * guarantee * that kind of return.
The last few weeks (months, really) has highlighted an incredible lack of discernment in the VC-verse wrt the thing we call web3. Now. I have no experience doing what YC does and don’t claim to, but the jig here was so transparent that the smallest drop of “street smart” should’ve been enough to set off some alarms. We’re approaching a point where being passed over for “culture fit” is a compliment. Hopefully the emb…
Once a phrase gains mainstream adoption and starts to rapidly lose meaning, I find that people who care dearly about that thing start calling it something else.
That said -- I really struggle to find the people who are really all in on crypto in a technical sense. Where are the people building cool things and trying to push the boundaries with crypto? Surely it's still happening but just hard to find it in all the debris/trash.
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I didn't invest because it was only 15% gains. Sad, but true. I actually read them their material & saw it was based on Anchor Protocol. When I saw that it was based on UST, and I couldn't figure how UST was backed by anything I understood, I opted out. One of the few times in crypto where I felt "do you won research" paid off for me.
> I didn't invest because it was only 15% gains I'm confused. Were you looking for a cryptocoin that was promising 1,500% gains? Anyone promising a safe 15% return in a world where your savings account earns 0.15% interest is trying to rob you.
The last few weeks (months, really) has highlighted an incredible lack of discernment in the VC-verse wrt the thing we call web3. Now. I have no experience doing what YC does and don’t claim to, but the jig here was so transparent that the smallest drop of “street smart” should’ve been enough to set off some alarms. We’re approaching a point where being passed over for “culture fit” is a compliment. Hopefully the emb…
> the thing we call web3 The thing some call web3.
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I didn't invest because it was only 15% gains. Sad, but true. I actually read them their material & saw it was based on Anchor Protocol. When I saw that it was based on UST, and I couldn't figure how UST was backed by anything I understood, I opted out. One of the few times in crypto where I felt "do you won research" paid off for me.
> I didn't invest because it was only 15% gains I'm confused. Were you looking for a cryptocoin that was promising 1,500% gains? Anyone promising a safe 15% return in a world where your savings account earns 0.15% interest is trying to rob you.
I really cannot believe how we let for so long that many charlatans drive clueless people to financial ruin.
The whole idea was to become a middleman to a ponzi scheme and charge a performance fee. They described what they are doing in their documentation, but the core ethical problem here is that the only users that would use their service are those incapable of understanding how UST/Terra worked, because anyone capable of understanding would just deposit funds directly and get higher APR for the same risk! Extremely preda…
I don't see how stablecoins are fundamentally a ponzi scheme, it's really not hard to imagine a sustainable stablecoin business model - reinvest what people pay into the stablecoin, keep risk low so you don't lose your principal and end up unable to repay debtors, keep enough in reserves that the stablecoin doesn't collapse in a bank run, and cross your fingers. Now, you certainly COULD turn this entire scheme into a…
Of course they are not, but UST is. Stablecoins are different from each other. USDT, USDC and DAI are all collateralized (at least partially). UST is minted out of void by burning LUNA, creating demand for LUNA so creators get a profit and turn away, slashing all UST investors. It is an outright ponzi scheme hidden behind layers of DeFi jargons and borrowing trust from true stablecoins like USDC while being fundamentally different from any other responsible stablecoin.