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Celsius Appears insolvent, and it's taking the whole crypto market with it

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Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#41

Post by glerk »

trhway wrote: post #12

Who said doublespent is impossible? Innovating your way out of such a limitation : "$stETH is a product by @LidoFinance. It stands for (liquid) staked $ETH and it's one of the most innovative DeFi products to be released in the last few years. $stETH can also be used to earn MORE yield than otherwise possible with vanilla $ETH. Why? Because while $stETH already earns staking yield, it can also be lent out or liquidit…

This is not double-spend. You are spending your ETH to buy a token. This token can be converted back to ETH (plus some interest) at a later date. In the meanwhile, you can do anything you want with this token: trade it, spend it, stake it on another platform, etc. But if you don’t bring it back, you are not getting back that ETH that you originally spent.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#43

Post by imustbeevil »

silisili wrote: post #27
pas wrote: post #26

Earlier quoted context omitted.

what was the the business model of these platforms? did they lend out the staked money, or how did they generate these yields?

I have zero idea. I did get the correct APY for one month before withdrawing, paid no fee, and was left with the same question.

They may have a whitepaper or something, but the simplest way to generate higher returns in a bull market is just to use leverage. I can sell you an ETF that returns 2x the NASDAQ, and use the money to buy a 3x and pocket the difference. It looks like I'm giving you a better return than the NASDAQ, but when the market goes down everything obviously collapses because it's only designed to work in one direction.

Of course, that sounds stupid as hell and you'd certainly hope that someone thought of something better, but this is exactly what happened with Terra/LUNA, except with more financial engineering to obfuscate the "if it goes down 25% we're fucked".

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#44

Post by mmarq »

jazzyjackson wrote: post #4

My favorite part of this is that because their reserves are illiquid, Celsius is forced to take out loans from other exchanges in order to pay out withdrawals. Each of these transactions/bailouts was visible on the blockchain and immediately called out on Twitter, accelerating withdrawals. A run on the exchange. If one major exchange goes bust and people learn that they have no recourse to recover funds, expect to se…

It seems that we need a government to provide deposit guarantee and a central bank that acts as a lender of last resort.

Welcome to the 19th century.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#45

Post by cersa8 »

CTDOCodebases wrote: post #22
datalopers wrote: post #7

The crypto market is crashing for the same reason real financial markets are crashing. The problems with Celsius are an irrelevant blip.

The problem or benefit of crypto land though is there are no bailouts so the insolvencies will be contagious.

I see it as a benefit. No bailouts means a proper cleansing of bad parties. It empowers good projects, vs rewarding bad behavior.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#46

Post by arka2147483647 »

viraptor wrote: post #17
suzzer99 wrote: post #8

Earlier quoted context omitted.

Except the real financial markets have a bottom where contrarian investors will step in and stop the free fall. What tangible value is there for a contrarian investor in crypto?

Same as before - hope the price is low enough and starts rising for the same reasons it was rising years ago.

Real markets, or the companies within, make something that people need. They have equipment, customers, etc. Maybe they are important enough that the state has to bail them out. Maybe they get restructured or merged.

Anyways, there is some kind of floor to which they can fall, and which will catch them.

What kind of "floor" is there for crypto? By definition it is not tied to anything non digital? Right?

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#47

Post by dkrich »

They were assuring customers of their stability, let’s see, six days ago: https://blog.celsius.network/damn-the-torpedoes-full-speed-a...

Surely there are going to be criminal charges forthcoming. Doing everything they can to prevent people withdrawing up to and including blatantly lying.

If history is any guide this isn’t close to over yet.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#48

Post by dave_sullivan »

suzzer99 wrote: post #8
datalopers wrote: post #7

The crypto market is crashing for the same reason real financial markets are crashing. The problems with Celsius are an irrelevant blip.

Except the real financial markets have a bottom where contrarian investors will step in and stop the free fall. What tangible value is there for a contrarian investor in crypto?

"Historical upside potential".

If it crashes 90% and then goes back to 30% of its peak a couple years later, pundits will declare bitcoin collapsed, but the people that bought around the bottom will make out like bandits.

I dont see many failure modes for crypto itself. The exchanges and all the speculative bullshit built around it are a big problem, but the network itself will survive and there is a price where people will start betting on upside again.

I say this as someone that bought my first bitcoin at $5 and sold my last one for $4500. I left a lot on the table.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#49

Post by dave_sullivan »

arka2147483647 wrote: post #46
viraptor wrote: post #17

Earlier quoted context omitted.

Same as before - hope the price is low enough and starts rising for the same reasons it was rising years ago.

Real markets, or the companies within, make something that people need. They have equipment, customers, etc. Maybe they are important enough that the state has to bail them out. Maybe they get restructured or merged. Anyways, there is some kind of floor to which they can fall, and which will catch them. What kind of "floor" is there for crypto? By definition it is not tied to anything non digital? Right?

A company can go out of business and cease to function. What would cause the Bitcoin network to cease to function? There will always be a market price and it will fluctuate. But the end of Bitcoin? Would be like the end of BitTorrent, not gonna happen.

Re: Celsius Appears insolvent, and it's taking the whole crypto market with it

#50

Post by sph »

greenpresident wrote: post #35
avinassh wrote: post #15

Earlier quoted context omitted.

Moderators seem to deleting all new comments on this Reddit post

It was linked on the Dramaverse and got brigaded. The thread was a couple of days old so it was easy to tell who got linked from outside.

WTF is the Dramaverse? My search engine isn't helping.
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