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

Post by Mo3 » Sun, May 22, 2022, 5:06 PM UTC

Mo3 wrote: post #49

axg11 wrote: post #36

Earlier quoted context omitted.

Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I think the interesting part here is the relation to bitcoin and a new theory on how to price things. It’s traditionally been assumed that the price of an asset is related to the underlying value it has or the value it generates (eg cash flow). SBF is pointing out that’s not a complete me…

That's a lacking comparison. The Gamestop stock has not been specifically created for this kind of "investing", neither does it not have fundamentals behind the value. Of course there's going to be speculation going on with any asset, but GME is not a purely speculative asset, and is not purely based on possible future application which isn't even known yet. There's a corporation behind it, which generates revenue, w…

Post by arinlen » Sun, May 22, 2022, 5:16 PM UTC

Mo3 wrote: post #49

axg11 wrote: post #36

Earlier quoted context omitted.

Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I think the interesting part here is the relation to bitcoin and a new theory on how to price things. It’s traditionally been assumed that the price of an asset is related to the underlying value it has or the value it generates (eg cash flow). SBF is pointing out that’s not a complete me…

That's a lacking comparison. The Gamestop stock has not been specifically created for this kind of "investing", neither does it not have fundamentals behind the value. Of course there's going to be speculation going on with any asset, but GME is not a purely speculative asset, and is not purely based on possible future application which isn't even known yet. There's a corporation behind it, which generates revenue, w…

Post by arinlen » Sun, May 22, 2022, 5:34 PM UTC

axg11 wrote: post #50

stingraycharles wrote: post #44

Earlier quoted context omitted.

> Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared? I’d argue that the intent of GameStop was not to provide a solid investment as it was just as a collective intent to make short sellers fail. I have serious trouble seeing how “collective agreements” has any intrinsic value. To me, it’s effectively the same as saying “the value of coin…

> I have serious trouble seeing how “collective agreements” has any intrinsic value. Then you probably don’t see value in any form of cryptocurrency. I do, because I think collective agreements are at the heart of how society functions. Fiat money is a collective agreement that works by the backing and enforcement of a central entity (government). It’s at least interesting to me to experiment with a collective agreem…

Post by Supermancho » Sun, May 22, 2022, 6:17 PM UTC

throwaway_1928 wrote: post #47

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…

> It's a fun game to play, just like casinos are fun. In 99.9% of cases nothing of value is behind these protocols. It is a lot of fun until people start becoming homeless and consider ending their life. https://www.reddit.com/r/terraluna/comments/un3w7t/i_lost_ov...

Post by s1artibartfast » Sun, May 22, 2022, 6:32 PM UTC

CTDOCodebases wrote: post #32

lordnacho wrote: post #5

DeFi/crypto detractors will say "but there's nothing backing it" which is not entirely crazy. After all you could just print out bits of paper and exchange them for money, so long as someone is willing to play that game with you. Blockchain is no different, it's just a clever way to record who has what. So why do people put billions in crypto but not in random bits of paper such as Pokemon cards? Liquidity. This is t…

Well put. The financial system largely exist for the purpose of wealth extraction. Sure, companies use the share market to initially raise capital but what is the true value of Amazon stock considering they don't issue dividends? Even with a stock that issues dividends how do know that it will happen for years to come? It's all speculation backed by nothing but emotion.