https://i.imgur.com/qz4EeQS.jpg - This is (was?) their ads "15% interest. No surprises."
Technically "15% interest. No surprises." is correct
YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
81–90 of 411 posts
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#82The 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…
I remember YC stating that they will "forfeit" (probably not the right legal term) their shares in companies that turn out to do unethical things. Now, let's see if they stick to their principles.
> I remember YC stating that they will "forfeit" their shares in companies that turn out to do unethical things.
Shares in a company are typically "forfeit" when the company you invested in goes bust.
While its a nice virtue signalling headline - giving up something worth 0 (only not worth a large negative number as shares are limited in liability) is not at all noble.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#83Earlier quoted context omitted.
I remember YC stating that they will "forfeit" (probably not the right legal term) their shares in companies that turn out to do unethical things. Now, let's see if they stick to their principles.
> I remember YC stating that they will "forfeit" their shares in companies that turn out to do unethical things. Shares in a company are typically "forfeit" when the company you invested in goes bust. While its a nice virtue signalling headline - giving up something worth 0 (only not worth a large negative number as shares are limited in liability) is not at all noble.
Sure, but if I remember correctly they said that they would give the shares back for free or something. So even if the unethical company didn't go bust but exited, they wouldn't get any cash.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#84The name "StableGains" sounded exactly like "SafeMoon", a heavily advertised pump-and-dump shitcoin that, unsurprisingly, was not safe, and did not go to the moon. Free money with no risk sure sounds appealing though, just don't think too hard about it.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#85https://i.imgur.com/qz4EeQS.jpg - This is (was?) their ads "15% interest. No surprises."
15% interest?
No! Surprises!
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#86Earlier quoted context omitted.
I think investors probably didn't know. High safe defi yield existed for most of 2020 and 2021 - during that time it would be legit. It's possible that's how it happened - first plan based on safe yield that disappeared (exactly because it was high and safe), but instead of closing down founders decided to become middlemen to a ponzi.
I feel like “safe” needs a giant asterisk applied to it in this sentence. Just because something didn’t explode previously, doesn’t mean it was safe until now.
No, perfectly safe three digit APR yield was the norm for months, and high double digit - for about 1.5 years. Checking the contracts was easy, as usually they were copied from other projects and thus known. Often capital was locked doing nothing at all, sometimes just providing liquidity in a lp pair. Took a while for the absurd risk premium to go down to its real value of ~0, crashing safe yields.
Ironically, this is partially what made UST so big - because to many people it looked like this:
(1) months of three digit APR - 'obviously unsafe' ('common sense' - high yield is sus, smells like ponzi)
(2) it wasn't a ponzi. Nothing bad happens. Many people make bank. Some have no idea what's safe and were just gambling, some make informed decisions
(3) eventually, the person in question feels stupid for missing free money and decides to put money in with no deep understanding
(4) safe yields crater from a combination of people like that + slow moving, but smart, funds that started to deposit hundreds of millions
(5) person in question deposits into the UST ponzi scheme by extrapolating safety record of non-ponzi farms that are now gone, due to a category error - 'it's defi and it was safe for so long, therefore UST is safe'
(6) not realizing it's a ponzi scheme they don't even try to exit when the gig is up. Massive loss.
Ironically I now see many examples of the same category error but applied in reverse - many people that lost on Luna think its collapse proved that defi is, in fact, fundamentally unsafe, when the reason they lost is because they put their money into a ponzi scheme that leveraged defi brand for marketing.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#871. HYIP (High Yield Investment Programs) is an old scam. Rebranding it as DeFi doesn't change this.
https://www.investor.gov/protect-your-investments/fraud/type...
2. Algorithmic "stablecoins" don't work, in the same way as perpetuum mobile doesn't work. You think you're inventing a perpetuum mobile, but you're building a Rube Goldberg's machine instead ;)
3. Every algorithmic "stablecoin" can be traced to 2 papers published in 2014: Hayek Money and Robert Sams' Seigniorage Shares
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#88The 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…
By definition, a Ponzi scheme involves some kind of reporting fraud where you're being lied-to about how your investment was converted and how much of that converted asset there is.
I'm not saying these aren't some other kind of scam but lots of people use "Ponzi" as if it meant any kind of scam... And generally speaking "how many thingy-coins do I own" is the one thing cryptocurrencies focus on making very difficult.
TLDR: Everybody overuses "Ponzi" and it annoys me.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#89YC has made some questionable bets in the last few years. Quantity over quality?
I stopped following their investments in like 2015 after they funded a startup that makes vegan condoms, whatever that is.
I didn't know either so I went on a quick Google - turns out, conventional latex condoms are soaked in casein to make them smoother [1], and said casein is also responsible for the sour-ish odor.
Vegan condoms and sex toys are made without casein or other animal-based byproducts.
Fun fact: a lot [2] of consumer goods use animal-based byproducts either as technical agents (e.g. beer that's being filtered through fish bladders) or as outright ingredients (shampoo, perfume, ...).
[1] https://www.greencondom.club/vegan
[2] https://www.onegreenplanet.org/animalsandnature/products-you...
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#90Earlier quoted context omitted.
“Forfeiting” shares in a company that has raised a couple million and funding and lost $42M in user funds seems like a bit of an empty gesture from YC
Of course. But I bet they're still not going to do it...
They stayed in Installmonetizer and Scribd afaict.