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Celsius acknowledges $1.2B hole in balance sheet

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Re: Celsius acknowledges $1.2B hole in balance sheet

#241

Post by capableweb »

adrr wrote: post #158
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…

Defi has other problems like the smart contracts getting exploited. $12b have been stolen from them according to the source below. https://www.elliptic.co/resources/defi-risk-regulation-and-t...

That's true, it's a inherent risk when you deal with "programmable money" in a open and decentralized ecosystem.

While it is a risk, major platforms (like the ones mentioned in parent comment [except Compound]) haven't actually had any exploits of that scope (yet?).

rekt.news is probably one of the best sources of news when it comes to exploits in both "pure" defi and also centralized "defi" (which, doesn't even make sense but I digress) like Celsius. Only Compound has been mentioned there.

Overall, the platforms have been running for a long time, during ups and down, and seem relatively stable at this point, if you're fine with the overall risk cryptocurrencies present.

Re: Celsius acknowledges $1.2B hole in balance sheet

#242

Post by once_inc »

bluelightning2k wrote: post #2

If I read it correctly it's more like a 1.8 bn hole. They are counting 600m of their own token, which already had only 170m or whatever of market cap, which presumably now is absolutely worthless. I don't mean worthless in a conceptual sense like all crypto, but this specific brand of made up money is based on the trust of a bankrupt lender. Nobody is buying that and counting it as 600m of asset is absurd. It's like…

> I don't mean worthless in a conceptual sense like all crypto

As a Bitcoin Maximalist, I agree with your statement almost wholeheartedly. These platforms offer nothing valuable except for the life lesson at the end not to gamble away your life savings in shady investment vehicles that offer unsustainable yields without a transparent earnings model.

Re: Celsius acknowledges $1.2B hole in balance sheet

#243

Post by aahortwwy »

darth_avocado wrote: post #197
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…

> CeDeFi You gotta be Kidding me. That’s like frozen boiling water.

https://en.m.wikipedia.org/wiki/Properties_of_water#Triple_p...

Re: Celsius acknowledges $1.2B hole in balance sheet

#244

Post by FabHK »

bigiain wrote: post #193
gkapur wrote: post #136

Earlier quoted context omitted.

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…

1) The block rewards are going to halve twice during those 7 years 2) the hardware is going to become obsolete well b4fore 7 years (although I wonder how the semiconductor shortage is holding back custom mining hardware design and manufacturing? Maybe in 2029 people will still be using today's hardware? I seriously doubt that.) 3) I'm reasonably sure arbitrage pushes the cost of mining asymptotically close to the pri…

In 3) s/arbitrage/competition, and apparently it is not only the electricity, but also the capital cost of the mining gear that you have to take into account.

Re: Celsius acknowledges $1.2B hole in balance sheet

#245

Post by TimJRobinson »

gcr wrote: post #178
TimJRobinson wrote: post #172

Earlier quoted context omitted.

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 sys…

Lumping all DeFi together is as dumb as lumping all "tech companies" together. If Enron fails does that make Microsoft and Google bad companies? They are totally different things.

Re: Celsius acknowledges $1.2B hole in balance sheet

#246

Post by FabHK »

trixie_ wrote: post #209
Nursie wrote: post #184

Earlier quoted context omitted.

I'm not. Cryptocurrency has explicitly and repeatedly been touted as un or anti-correlated to the wider financial ecosystem, fiat currencies and the stock market, and has been loudly, noisily and never-endingly sold as a great hedge against these things, absent any evidence. The evidence is in now, and those theories are a bust.

There are many theories about everything. Sorry the ones you bought into didn’t work out. Most of us aren’t surprised that when the dollar is manipulated that other asset classes’ dollar values change as well.

The notion that the volatility of crypto currencies are due to the value of the dollar being manipulated (rather than the "value" of the crypto) is absurd. You can trivially compare the value of a dollar to a basket of currencies (e.g. the U.S. Dollar Index/Dixie), or a basket of goods (like the consumer price index), and it is fairly stable, and definitely not as wild as the gyrations of crypto prices.

Re: Celsius acknowledges $1.2B hole in balance sheet

#247

Post by TimJRobinson »

tsimionescu wrote: post #229
jrm4 wrote: post #198

Earlier quoted context omitted.

Sure, I'll take it a step further. Any storage of your money that doesn't involve you fully controlling your own keys is stupid because it is literally antithetical to the entire purpose of crypto. If you want to let someone else hold on to your money for yield, great. Use something already established, ensured, and proven. But not crypto . Not your keys, not your crypto. How many times must it be said?

This only works if you use crypto as a store of value and even then it doesn't scale to any significant fraction of the population, for most coins. BTC and Eth, at least, are simply too slow for everyone to have their own wallet and do their own on-chain transactions, even if rarely, if we imagine they will ever reach some significant portion of the population. And LN doesn't solve this in any way, before anyone clai…

Layer 2's do solve it, and will reach 14M TPS by 2030 [0], which is more than enough for the world. He has explanations of how the different components work in different posts on the site.

0: https://polynya.medium.com/conjecture-how-far-can-rollups-da...

Re: Celsius acknowledges $1.2B hole in balance sheet

#248

Post by FabHK »

trixie_ wrote: post #175
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.

> History proves in the long run holding dollars is good for short term stability, but it's a long term loser.

Right. That's why one should not hold huge quantities of money for long times, but invest in debt and equity. 10 yr real rates even on treasuries have been almost always positive [1], though shorter riskless real rates have gone negative [2].

[1] https://fred.stlouisfed.org/series/REAINTRATREARAT10Y

[2] https://fred.stlouisfed.org/series/REAINTRATREARAT1YE

Re: Celsius acknowledges $1.2B hole in balance sheet

#249

Post by heavenlyblue »

Peleus wrote: post #224
kelseyfrog wrote: post #216

Earlier quoted context omitted.

There's nothing to support. The block chains immutability means no takebacks. The phone line can just have a message on repeat "Sorry, nothing can be done. The Blockchain is the source of truth." Customers can then just hang up knowing that it's the real world that is wrong and not a thing on chain. This is blockchain realism at its finest.

Fucking lol. I can just imagine a company sending a package to the wrong address. The customer rings the company to ask what's going on. "Sorry the blockchain is immutable, we can't change where your package is going, deal with it". Yes, blockchain totally solves all these problems... I worry if people are actually this delusional.

> I worry if people are actually this delusional.

Would it make you worry more or less if they are not delusional but just plainly not thinking?

Re: Celsius acknowledges $1.2B hole in balance sheet

#250

Post by FabHK »

impulser_ wrote: post #55
sergiotapia wrote: post #14

Earlier quoted context omitted.

Still waiting to see even one single useful use case for cryptocurrency and block-chain storage. It's all a grift to take money away from stupid retail investors trying to get rich quick.

There are features of cryptocurrencies that would actually be useful in today's financial services. The main one would be near instant settlement. If I make a transaction on Bitcoin, that transaction is completely settled and verified and approved over a hundred thousands times within an hour. All parties can trust that the transaction happened and everyone has their money. That's not possible in today's financial sy…

First, you are conflating settlement of securities with money transfers, two different things.

Next, I can transfer money in Europe (SEPA) settling immediately, for a tiny fee ($0.30 or so).

Finally, I've had BTC transactions in the mempool for 16 hours or more, hanging in there without any confirm. They might just drop out, or they might eventually be included in a block - who knows. Not exactly a predictable and reliable money transfer.

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