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YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

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Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#291

Post by nrmitchi »

Cederfjard wrote: post #276
nrmitchi wrote: post #270

Earlier quoted context omitted.

> anti-flamewar This is a story about a company 1) in the crypto space, that 2) lost all of it's users money, and 3) used misleading disclaimers (and potentially trying to change them after the fact) It has already devolved in multiple threads to discussion about what is-and-is-not technically a ponzi scheme (vs other forms of scams/fraud). This whole thing is a recipe for a giant flame war.

To be fair, do you really expect a community as nerdy as this not to engage in pedantry about semantics? I would anticipate that in every discussion, inflammatory or not (I might even participate).

Kind of beside the point, because pedantry about semantics with respect to "what kind of scam/fraud/etc was it that lost $42M of user's funds" leads directly to flamewar-style threads, which is what can reasonable cause a story to be deranked due to and anti-flamewar filter.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#292

Post by [deleted] »

disiplus wrote: post #216
gitfan86 wrote: post #210

Earlier quoted context omitted.

Indirection seems to be very valuable with scams. The 2008 housing crash had a lot of layers: 1. Loan Application (Borrower Lying about income) 2. Mortgage Originator ( Not validating loan application ) 3. Mortgage Back Security Creators ( Obfuscate what is in the security ) 4. Ratings Agencies ( Not being honest that step 3 happened ) 5. Sellers of MBS ( Not being honest that steps 1-4 exist ) I don't know enough ab…

im pretty sure at this point everybody knows there is nothing behind it, at least 80% people that invest in something like this, so like Ponzi they hope that enough people will come in that they can cash out before everything falls out.

[deleted]

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#293

Post by nivertech »

dropnerd wrote: post #252
nivertech wrote: post #87

1. 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 p…

algo stablecoins work fine when they're overcollateralized, like dai. the industry keeps chasing undercollateralized algo stablecoins because of capital efficiency. jon wu explains to laura shin, worth a watch: https://twitter.com/laurashin/status/1525505300219961344

> algo stablecoins work fine when they're overcollateralized, like dai.

DAI/MakerDAO isn't an algorithmic "stablecoin", it's an unregistered SEF (Swap Execution Facility) which should be regulated by the CFTC in the US, and similar agencies in other parts of the world.

The only reason DAI didn't broke the USD peg during the "crypto" bear market, is because OG's cost base of ETH was zero to 30 cents, and their objective was to save MakerDAO, rather than make a profit on their CDPs.

> the industry keeps chasing undercollateralized algo stablecoins because of capital efficiency.

Isn't it obvious? ;)

The energy industry also chased perpetuum mobile because of the fuel efficiency, so what?

IMO there are ways to design a capital-efficient low-volatility digital assets (not algorithmic "stablecoins" per say - they're impossible), but they will most-likely be illegal in any developed country, as they will be an exotic derivative instruments.

From the JTBD PoV, the job of the "stablecoins" is to hedge your exposure to the volatile "crypto" assets. The only way to do this is either to exchange them to a less volatile assets, or to enter into a contract with somebody else willing to take the risk in exchange for something.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#294

Post by puranjay »

MacsHeadroom wrote: post #238
shigawire wrote: post #197

Earlier quoted context omitted.

Dumb question but what's the user experience difference between a browser wallet and saving a credit card in a password manager?

Crypto wallets double as a kid of single sign-on identity. If you have a crypto wallet in a browser add-on, you already have a paudonymous account usable on tens of thousands of crypto enabled web apps. All you have to do is one-click sign-in. No sign-up flow, no emails, no commitment. You just tap login and you have an account. One more tap and you've paid. Plus other benefits like effectively free micro-transaction…

I fear that any regulation that enables wider adoption of these wallets will also bring in additional steps that will kill the biggest pros of these wallets currently - privacy and anonymity

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#295

Post by giansegato »

eis wrote: post #266

Another negative story about a YC company which has risen to the front page of HN and then seems to be getting a lot of pressure to get ranked down. It has more points and is fresher then a handful of other stories on the frontpage but ranks lower and is falling quickly. And when mentioned in the past, the reason often is the invisible anti-flamewar or similar features. What is it this time? Elon needs to buy HN and…

ime mods here tend to actually stay away from negative yc stories, in order to not get into slippery paths. don’t have proof of it, but the simple fact that this is still up with 400 points is a fact.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#296

Post by lalaland1125 »

xtracto wrote: post #155

This made me think... back in 2012, a startup called Kueski (now a very successful BNPL in Mexico) applied for YC (twice in 2 years). The founders were rejected, even though the business model was sound and the economics were pretty well laid out (I know the CEO and ge is a really meticulous person). The reason YC gave for the rejection was that Mexico was an unknown market, and they felt lending in there was too ris…

> Was YC aware of the ponzi nature of this thing and decided to dip in?

It's extremely profitable to invest in a Ponzi if you are early to the scheme.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#297

Post by grogenaut »

nrmitchi wrote: post #270
eis wrote: post #266

Another negative story about a YC company which has risen to the front page of HN and then seems to be getting a lot of pressure to get ranked down. It has more points and is fresher then a handful of other stories on the frontpage but ranks lower and is falling quickly. And when mentioned in the past, the reason often is the invisible anti-flamewar or similar features. What is it this time? Elon needs to buy HN and…

> anti-flamewar This is a story about a company 1) in the crypto space, that 2) lost all of it's users money, and 3) used misleading disclaimers (and potentially trying to change them after the fact) It has already devolved in multiple threads to discussion about what is-and-is-not technically a ponzi scheme (vs other forms of scams/fraud). This whole thing is a recipe for a giant flame war.

I do enjoy that much of the thread is down to arguing semantics and terms over what kind of scam it is. soon we'll be arguing over if the P is capitalized or not. https://xkcd.com/915/

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#298

Post by kgwgk »

shkkmo wrote: post #285
kgwgk wrote: post #188

Earlier quoted context omitted.

It wasn’t so obvious for some people… https://www.hbs.edu/faculty/Pages/profile.aspx?facId=697248 https://medium.com/terra-money/have-you-met-marco-216ca2a8b9... https://assets.website-files.com/611153e7af981472d8da199c/61... https://cdck-file-uploads-global.s3.dualstack.us-west-2.amaz... Why did you decide to join Terra? I thought Terra provided the perfect environment to apply what I learned in my research. Ensurin…

Nothing in there indicates that he thought Terra would stay stable. Indeed, you can even read it has him wanting him to be involved becuase he found the lack of stability an interesting problem to try and solve.

“We propose a cryptocurrency, Terra, which is both price-stable and growth-driven. It achieves price-stability via an elastic money supply, enabled by stable mining incentives.”

“Terra achieves price stability by creating stable incentives for mining (PoS consensus) via highly predictable rewards. We propose a framework to evaluate the stability of Terra’s peg under stress. […] Our findings, based on 1 million years’ worth of simulation data, indicate that Terra’s peg is highly robust under both forms of stress.”

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#300

Post by Uehreka »

eis wrote: post #266

Another negative story about a YC company which has risen to the front page of HN and then seems to be getting a lot of pressure to get ranked down. It has more points and is fresher then a handful of other stories on the frontpage but ranks lower and is falling quickly. And when mentioned in the past, the reason often is the invisible anti-flamewar or similar features. What is it this time? Elon needs to buy HN and…

I'm pretty sure stories get naturally downranked (even if they have a lot of points) as the number of comments begins to approach the number of upvotes. I think the idea is "anything with more comments than upvotes is probably a flame war". It may not be the best way to rank stuff, but HN is explicitly not a democracy.
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