Once upon a time, the emperor had no clothes.
Celsius Appears insolvent, and it's taking the whole crypto market with it
81–90 of 107 posts
Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#82Oh boy oh boy that thread had lots of ETH and sETH and oETH und BTC and what not. No wonder that it's hard for some people to see the Ponzi schemes, pyramid schemes and what else those things are called. Regulations anyone? Or do we now just see people loosing their money?
Crypto has become a gacha game. So many currencies that you lose contact with how much money you put in in the first place.
Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#83Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#84Earlier quoted context omitted.
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.
Doesn't that token represent staked ETH, ie. ETH which nothing can be done with, ie. no "trade it, spend it, stake it on another platform, etc. " ? Now, you take that new token, exchange into new ETH, stake that new ETH, and get again that new token, ad infinitum, every time increasing your staked ETH amount and thus accruing stake yield of that multiplied staked ETH ... One would naturally expect that a system allow…
> Now, you take that new token, exchange into new ETH
You can only exchange it back into ETH after the lock period is over. Sure, you can buy ETH from someone else in exchange for this token, but you will pay a premium for that: obviously, people prefer ETH to some token that can be exchanged for ETH in the future and there is not an infinite supply of ETH available to be sold for this token.
So no, you can’t just increase your ETH ad infinitum. At each iteration of the loop, your amount of tokens will decrease until you have none left.
Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#85I had been warning about Celsius for months, in fact I even published this blog post last year: https://rorodi.substack.com/p/the-biggest-crypto-lending-com... Also posted it here on HN but it did not get much traction. What really baffles me is that major VCs have put hundreds of millions into what pretty much every one who has watched one or two episodes of "American Greed", would immediately recognise as being a p…
A friend warned me about them back a year ago:
https://www.coindesk.com/business/2021/06/24/custodian-prime...
Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#86Does anyone have any inkling about Voyager? I only ask because when I was looking into it last year, seemed everyone said 'use Celsius or Voyager', so I assume they are somewhat similar. I used Voyager to get 9% APY on USDC just to test it, but chickened out and withdrew it all because I basically envisioned something like this happening.
what was the the business model of these platforms? did they lend out the staked money, or how did they generate these yields?
The business model of Celsius was loan USD to people and earn interest.
The loans were overcollateralised with the users Bitcoin.
The problem is Celsius wasn’t content with just earning interest from loaning money so they invested their users Bitcoin in crypto projects that ended up going pear shaped.
Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#87Earlier 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?
If you’re buying growth stocks that pay no dividends there isn’t much of a difference, and there’s no coincidence that those are also the stocks that have crashed as hard as crypto.
Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#88I had been warning about Celsius for months, in fact I even published this blog post last year: https://rorodi.substack.com/p/the-biggest-crypto-lending-com... Also posted it here on HN but it did not get much traction. What really baffles me is that major VCs have put hundreds of millions into what pretty much every one who has watched one or two episodes of "American Greed", would immediately recognise as being a p…
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Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#89Regarding the investment part (not the marketing or insurances obv.) how is that different from what an investment bank does when it invest in long term products? If the funds are in e.g. long term bonds, real estate, mortgages... the investors can't get back all of their money all at once, it will take years to mature, also the capital they are required to hold are only a few percent, so they are also technically in…
I think the major difference is that such investments are usually in substantial assets. Something that definitely can't be said of some of those fantasy funny coins.
In theory maybe, in practice I don't find speculation on financial products any more substantial, like stocks where they are not owned with aims regarding dividends or the governance of the company (which is the point of a stock) but only to be unloaded on someone in the future at a higher price. The nature of the token doesn't matter in that case only the sentiments of other traders.
Re: Celsius Appears insolvent, and it's taking the whole crypto market with it
#90Regarding the investment part (not the marketing or insurances obv.) how is that different from what an investment bank does when it invest in long term products? If the funds are in e.g. long term bonds, real estate, mortgages... the investors can't get back all of their money all at once, it will take years to mature, also the capital they are required to hold are only a few percent, so they are also technically in…
I think it is similar in that it is possible for a fund to become insolvent, but consumers are protected by the Investment Company Act of 1940. This requires the companies that run mutual funds to rely on a custodian bank to hold their assets. This way, if the fund does go bankrupt, the company operating it cannot access them to ensure that investors are paid out instead of being rug pulled. It limits the amount of l…
Sure I understand regarding the protections. But regarding the nature of the investments by themselves in don't find the difference meaningful enough to earn the label "truly degenerate trading strategies with investor funds." compared with what we currently see in non-crypto Finance, which is equally degenerate for me in that case.