TerraUSD crash led to vanished savings, shattered dreams

Post by _carbyau_ » Wed, Jun 22, 2022, 4:37 AM UTC

xwdv wrote: post #25

sumy23 wrote: post #10

Earlier quoted context omitted.

People are so smug when they say “I told you so.” It really bothers me. On every negative story about crypto, so many people comment “hur dur financial regulation dur”. But that’s so easy to say after the fact. If these people really could foresee these events happening, then they could have made a lot of money by taking short positions. That would be a lot more impressive to me than taking cheap opportunities to fee…

There are few joys in life greater than being able to self-righteously say “I told you so” to those who felt so strongly about something wrong.

Post by worik » Wed, Jun 22, 2022, 4:41 AM UTC

Post by [deleted] » Wed, Jun 22, 2022, 4:48 AM UTC

Animats wrote: post #7

Oh, no. They had feeder funds. Stablegain [1] was feeding money into them: You can now earn up to 15% APY interest on your cash with Stablegains. This is 30x higher than in your traditional bank. You can deposit and withdraw using your preferred methods (ACH, wire transfer, USDC) with the help of our partner Circle. There are no long-term lock-up periods. Earn passive income every day We take care of all technical as…

Post by junofan » Wed, Jun 22, 2022, 4:50 AM UTC

propter_hoc wrote: post #131

MBCook wrote: post #116

Earlier quoted context omitted.

So I take my coin, pegged to the dollar, and lend it Anchor for a 20% return. Anchor lends it out to someone else at >20% APR because that other person is… brain dead? Who would accept that? But again, where do the new Terra coins come from? If Anchor pays me in more stable coins, they had to buy USD to be allowed to mint them right? Does that mean I bought Terra with USD to allow Anchor (which is Terra?) to sell my…

My understanding (probably incomplete) is that a lot of the loans were short-term "flash loans". Being that the term was quite short, they're more akin to payday loans. If you were to compute the loan on an APY basis it would be usurious, but since it's only for a short period the total amount paid is small. Collect many of those short-term high-interest loans into a single bucket, and you have a longer-term high int…

Post by KMag » Wed, Jun 22, 2022, 4:53 AM UTC

sumy23 wrote: post #137

KMag wrote: post #132

Earlier quoted context omitted.

> You’re basically describing options. Well, with vanilla options, you'd need a basket of options to both reasonably closely replicate performance of a broad index (the "responsible vehicle" part) and also a small percentage of the time hitting a big pay-out. Presumably, you'd want mostly short-duration at-the-money calls on a low-fee broad-index ETF (so they often end up owning the ETF), and a small number of deep o…

I don't think investing in short-term at-the-money options would be a good strategy because you'd lose a lot to premiums. It'd be better package long positions on the low-fee ETFs mixed with some deep otm options as an investment vehicle. Love the concept!