Celsius acknowledges $1.2B hole in balance sheet • Hacker News Board

Re: Celsius acknowledges $1.2B hole in balance sheet

#171

Post by powerhour » Fri, Jul 15, 2022, 1:49 AM UTC

menzoic wrote: post #143

powerhour wrote: post #61

Earlier quoted context omitted.

This sounds good until someone makes a mistake and your money is irreversibly gone forever.

This is based on a common misunderstanding of Blockchain. Yes transactions are immutable, but reversing is not necessary. All fiat backed stablecoins run on decentralized infrastructure but they also operate on smart contracts that give the creators the ability to mint and burn coins at will in order to credit fiat deposits and burn tokens for fiat withdrawals. The fact that it runs on an immutable Blockchain just me…

Sure, you can make new transactions that do whatever you want, but can you force the recipient (edit: or smart contract author) to create a transaction that returns the tokens or do you have to hope they'll do it on request?

Re: Celsius acknowledges $1.2B hole in balance sheet

#172

Post by TimJRobinson » Fri, Jul 15, 2022, 1:50 AM UTC

Nursie wrote: post #145

dcolkitt wrote: post #117

One thing to note is that while Celsius, a centralized and opaque yield platform, collapsed, not a single major DeFi protocol failed during a period of enormous stress. MakerDAO, Aave, Uniswap, Curve, Lido and Compound all had perfect 24/7 uptime with zero losses due to unrecoverable debt. This pretty clearly strengthens the case for pure and transparent DeFi, where anybody can inspect the health of the protocol or t…

> not a single major DeFi protocol failed during a period of enormous stress Was Terra/Luna/Anchor/Whatever not a DeFi protocol?

They were a DeFi ponzi chain which was obviously going to fail to anyone who spent time looking into it. They were printing a stablecoin backed by nothing.

Far different from the blue chip DeFi apps on Ethereum that the OP listed, which process billions of dollars per day without issue.

DeFi makes things more transparent, but it doesn't make them risk free.

I personally profited off the collapse because of the transparency. Couldn't do the same with Celsius or traditional finance.

Re: Celsius acknowledges $1.2B hole in balance sheet

#173

Post by [deleted] » Fri, Jul 15, 2022, 1:56 AM UTC

ayngg wrote: post #62

kareemsabri wrote: post #37

Earlier quoted context omitted.

In what way did it seem like a "legit serious business hedge fund"? I'm unclear how Celsius got scammed making loans to a hedge fund that is on record as investing exclusively in crypto since 2018 [1] - did the hedge fund lie about their positions? 1. https://www.smh.com.au/business/markets/school-friends-start...

Celsius got huge deposits based on unsustainable yield guarantees (17% I think), they took that crypto and used it as collateral on defi protocols, then took the loans they got and gave it to funds like 3ac, who made money on leveraged carry trades that eventually worked up to Luna which was offering an absurd 20% apy through anchor which was completely unsustainable but basically kept afloat by Luna itself dumping m…

[deleted]

Re: Celsius acknowledges $1.2B hole in balance sheet

#174

Post by Peleus » Fri, Jul 15, 2022, 1:57 AM UTC

kelseyfrog wrote: post #137

Peleus wrote: post #84

Earlier quoted context omitted.

> I remember vividly opening the door to the pig pen, and it was just a sea of people, 95% just responding to very basic customer queries/doing incredibly basic computation work and costing huge amounts of money...because, of course, there is no cost pressure from "customers"...a parallel that more people understand is US healthcare admin, huge inefficiencies, pension admin is like that How does blockchain solve this…

Blockchain solves it by making it so that all that goes away. In return if something fucks it up...well look at every crypto project that has ever crashed. I'm not being glib. That's the solution.

so that all that goes away

All WHAT goes away? You're talking about hordes of people answering customer queries. How the hell does blockchain make that go away?

Re: Celsius acknowledges $1.2B hole in balance sheet

#175

Post by trixie_ » Fri, Jul 15, 2022, 2:02 AM UTC

AndrewKemendo wrote: post #82

The fact that the entire crypto market simply followed the public markets in the downturn, rather than being a haven for wealth that people flocked to for safety, means that "Crypto" is unambiguously just another speculative asset like Art (but worse).

For every seller there is a buyer, and many are buying stocks and crypto right now at low prices. And why wouldn't they? The fed is manipulating the market with interest rates, just as they did during Corona. History proves in the long run holding dollars is good for short term stability, but it's a long term loser.

Re: Celsius acknowledges $1.2B hole in balance sheet

#176

Post by 300bps » Fri, Jul 15, 2022, 2:02 AM UTC

TimJRobinson wrote: post #172

Nursie wrote: post #145

Earlier quoted context omitted.

> not a single major DeFi protocol failed during a period of enormous stress Was Terra/Luna/Anchor/Whatever not a DeFi protocol?

They were a DeFi ponzi chain which was obviously going to fail to anyone who spent time looking into it. They were printing a stablecoin backed by nothing. Far different from the blue chip DeFi apps on Ethereum that the OP listed, which process billions of dollars per day without issue. DeFi makes things more transparent, but it doesn't make them risk free. I personally profited off the collapse because of the transp…

They were a DeFi ponzi chain which was obviously going to fail

This is an excellent example of the “No True Scotsman” logical fallacy.

Re: Celsius acknowledges $1.2B hole in balance sheet

#177

Post by trixie_ » Fri, Jul 15, 2022, 2:04 AM UTC

Nursie wrote: post #152

l33t2328 wrote: post #112

Earlier quoted context omitted.

I’m confused what the alternative is. If it’s valuable and people lose value somewhere in their life, they will exchange their valuable thing to make up for it.

> I’m confused what the alternative is. For years it has been claimed that cryptocurrency represented a great hedge against traditional assets and investments in the case of a downturn. Like many other claims made about the utility of cryptocurrency, this too has been shown not to be the case.

Like stocks, don't confuse short term volatility with long term performance. The fed is expert at manipulating short term valuations, but their manipulations only hold for so long before they have to lower or raise rates again.

Re: Celsius acknowledges $1.2B hole in balance sheet

#178

Post by gcr » Fri, Jul 15, 2022, 2:05 AM UTC

TimJRobinson wrote: post #172

Nursie wrote: post #145

Earlier quoted context omitted.

> not a single major DeFi protocol failed during a period of enormous stress Was Terra/Luna/Anchor/Whatever not a DeFi protocol?

They were a DeFi ponzi chain which was obviously going to fail to anyone who spent time looking into it. They were printing a stablecoin backed by nothing. Far different from the blue chip DeFi apps on Ethereum that the OP listed, which process billions of dollars per day without issue. DeFi makes things more transparent, but it doesn't make them risk free. I personally profited off the collapse because of the transp…

Calling "pilot error" in response to a service interruption of your least favorite token is like saying "sure, our perl CGI gateway was down, but that doesn't count as downtime since our caddy frontend and deno server is still up."

If a token permanently loses 99.9% of its value, or if a major lender freezes withdrawals, I'd call that a service interruption because almost all users lost the value they held in the system.

Re: Celsius acknowledges $1.2B hole in balance sheet

#179

Post by replygirl » Fri, Jul 15, 2022, 2:11 AM UTC

gkapur wrote: post #136

ufo wrote: post #56

Earlier quoted context omitted.

Don't forget about the $720M in "Mining Assets". I wouldn't be surprised if the true value were much lower than this, now that crypto prices have crashed.

I think they are claiming they can mine something like 10k bitcoin/year ( https://twitter.com/ThePrivatier/status/1547613977231798272 ) going forward but I have no idea what the COGS/cost between labor/maintenance and electricity is to mine that. If it's say 50%, then those "mining assets" will pay back in 7 years. Seems like people are going to take a large haircut on whatever they deposited and then maybe get back…

i remember struggling to do 50% in 2017 lol

Re: Celsius acknowledges $1.2B hole in balance sheet

#180

Post by gcr » Fri, Jul 15, 2022, 2:12 AM UTC

everfree wrote: post #110

Barrera wrote: post #41

And yet the site apparently continues to accept deposits: https://celsius.network Business as usual. Oh yeah, check out our hello bar for that minor detail that withdrawal, swap, and transfers are "currently paused." These guys are going to prison.

The site is not actively accepting deposits. Did you assume that it was, based on something you saw there? Read this passage from Alex Mashinsky's bankruptcy affidavit: > Importantly, however, shortly after the Pause Date, on June 18, 2022, Celsius made the necessary changes to the Celsius App to prevent any new users from generating a deposit address and thus being able to deposit cryptocurrency on the Celsius platf…

If Celsius is accepting deposits on existing addresses, they are continuing to accept deposits that they know their customers can't access. Celsius designed the system without an off switch because DeFi systems generally view that as an anti-feature, but that means that they probably aren't able to be compliant with the bankruptcy affidavit.

You yourself wrote that they "can't prevent" deposits for existing accounts. It's very pertinent.