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Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

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Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#11

Post by puranjay »

lordnacho wrote: post #10
puranjay wrote: post #9

Earlier quoted context omitted.

imo, this liquidity is precisely what's stifling widespread crypto adoption. Speculators kill long term growth of any project and punish actual users the most. GameFi is the perfect example - prices go up as speculators pile in. Actual gamers suddenly can't afford to play (which is why you have gaming "scholarships" - an absurd idea). Most projects that have earmarked tokens for their employees suffer as well. As the…

Indeed, there is a case against overfinancialization. Everything becomes anticipation, there's less point in actually making the thing Vs marketing the stock.

Seen this happen with so many developers that I’m completely jaded by this space. Dev launches a promising project idea. Token balloons because of the reputation of the dev or promise of the idea. By the time the product actually launches, the price has cratered. Devs, team members and users can’t be compensated enough in the native token and abandon the project

Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#12

Post by mywaifuismeta »

It's kind of a Ponzi scheme, but not really since it's not (usually) orchestrated by one malicious entity. Instead, it's a collaborative community effort with the community doing marketing and driving the price. In other words, the dirty work if customer acquisition and advertising is outsourced. It's not so different from crazy startup valuations that are often a result of market forces and competition, with the hope of exiting through acquisition to generate returns before anyone notices not much of value actually exists.

It's a fun game to play, just like casinos are fun. In 99.9% of cases nothing of value is behind these protocols.

Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#13

Post by Melting_Harps »

thematrixturtle wrote: post #6

> SBF: Well, okay. So you've got this boxes and it’s kind of dumb, but like what's the end game, right? This box is worth zero obviously. It blows my mind that the people profiting from this are publicly describing the scheme like this, and nobody seems to care.

> It blows my mind that the people profiting from this are publicly describing the scheme like this, and nobody seems to care.

This is the same guy the media and lots of HN were parroting his 'Bitcoin has no future' artile recently, when it should have been caveated as 'No future as a pump and dump' token for DeFi scams. Which is true, their is really no way to do that in the BTC ecosystem, and for good reason. Wrapping and all that was the closest thing, and to be honest it was short-lived.

Sam is a clear example of what happened from 2014 onward, billionaires made from the least interesting aspects of this ecosystem, which incidentally is also why most of VC has poured into this space.

Honestly, their is no value in ~95% of alts, they are the 'pink sheets' of the crypto currency space.

Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#14

Post by sokoloff »

puranjay wrote: post #11
lordnacho wrote: post #10

Earlier quoted context omitted.

Indeed, there is a case against overfinancialization. Everything becomes anticipation, there's less point in actually making the thing Vs marketing the stock.

Seen this happen with so many developers that I’m completely jaded by this space. Dev launches a promising project idea. Token balloons because of the reputation of the dev or promise of the idea. By the time the product actually launches, the price has cratered. Devs, team members and users can’t be compensated enough in the native token and abandon the project

Could you list a few of these promising ideas that were killed by this process? I’m admittedly not following closely, but most of what I’ve glanced at seemed like “would only get funded as a by-product of defi/crypto craze”.

Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#15

Post by mywaifuismeta »

darawk wrote: post #3

What farming actually is is companies using their equity directly as marketing incentives. In principle, there is nothing really wrong with this, although usually companies don't find that to be the most efficient way to use their equity. The problem with farming was that, in many, but not all, cases, the equity in question had no value. It isn't true that they were all ponzi schemes, though. Many of the tokens did g…

While the analogy is correct, a key difference is that startups are illiquid by definition. Founders can't just cash out and are thus incentivized by build something of value. With protocols, there is no incentive to build something of value. Instead, the incentive is to building something that looks valuable on the surface to generate liquidity and cash out at the best point.

Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#17

Post by Jabbles »

mywaifuismeta wrote: post #12

It's kind of a Ponzi scheme, but not really since it's not (usually) orchestrated by one malicious entity. Instead, it's a collaborative community effort with the community doing marketing and driving the price. In other words, the dirty work if customer acquisition and advertising is outsourced. It's not so different from crazy startup valuations that are often a result of market forces and competition, with the hop…

Sick of people calling everything in crypto a Ponzi scheme. Some crypto projects are pump and dump schemes, while others are pyramid schemes. Others are just standard issue fraud. Others are just middlemen skimming of the top. Stop glossing over the diversity in the industry.

https://twitter.com/patdennis/status/1518637225789042688

Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#18

Post by perihelions »

It's a Ponzi scheme. He doesn't even seem to push back against the "Ponzi" phrasing.

Also -- this is merely a footnote -- his Ponzi scheme is currently the 3rd-largest political donation source in the USA.

https://www.opensecrets.org/outsidespending/summ.php?GoToPag...

https://www.nbcnews.com/politics/2022-election/-crypto-cash-...

Re: Sam Bankman-Fried Described Yield Farming and Left Matt Levine Stunned

#19

Post by mywaifuismeta »

Jabbles wrote: post #17
mywaifuismeta wrote: post #12

It's kind of a Ponzi scheme, but not really since it's not (usually) orchestrated by one malicious entity. Instead, it's a collaborative community effort with the community doing marketing and driving the price. In other words, the dirty work if customer acquisition and advertising is outsourced. It's not so different from crazy startup valuations that are often a result of market forces and competition, with the hop…

Sick of people calling everything in crypto a Ponzi scheme. Some crypto projects are pump and dump schemes, while others are pyramid schemes. Others are just standard issue fraud. Others are just middlemen skimming of the top. Stop glossing over the diversity in the industry. https://twitter.com/patdennis/status/1518637225789042688

What I don't like about this terminology is that I associate these "schemes" with a malicious actor. Someone trying to scam you. But often that's not the case with these crypto projects. Often, nobody is explicitly trying to scam anyone, but everyone looks out for themselves first and wants to make money, which inevitably results in other people losing money if they are too late.

If a traditional startup is valued at $10M, I'm sure many founders would choose abandon it and take $5M in cash if only they could. The difference is that the liquidity is not there, so the option doesn't exist. In crypto, protocol founders may not start the project with the goal of abandoning it, but once they can choose between cashing out with $5M by abandoning it, they take that route because they can. People then call this a "rug pull" or "ponzi scheme" but I don't think the intentions are the same.

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