It was all for charity. People are mean. https://twitter.com/The_Prologuist/status/158967849854920704...
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FTX held less than $1B in liquid assets against $9B in liabilities
71–80 of 189 posts
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#72Earlier quoted context omitted.
What is an "Ethereum multi-sig wallet"? Is that a piece of hardware? Multiple pieces of hardware? A piece of software?
There's different ways to handle multi-sig, but https://gnosis-safe.io is probably the current gold standard, and it's pretty easy to set up and use. It's a smart contract that you can add any type of owner to (regular wallet, hardware wallet, anything that can sign for transactions), then you specify how many of the owners need to sign for transactions.
When you "set up and use" that Gnosis thing, how do you verify it is doing the right thing and has no backdoor built in?
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#73> In all, the spreadsheet says FTX Trading’s assets were $900mn of “liquid” assets, $5.5bn of “less liquid” assets consisting of crypto tokens Aren't tokens supposed to be "liquid" or is this a different way of saying the tokens are worthless?
My understanding is that a lot of their assets were in their own cryptocoin that they borrowed against like: 1. Make million new coins called $mikecoin 2. Sell 1 $mikecoin to a friend for 1 USD 3. Claim that the "Total Market Cap" for $mikecoin is 1 million USD 4. Borrow Bitcoin or dollars against your $mikecoin reserve.
This seems to be the trick. I think this same thing also explains the high market cap of many altcoins, such as Solana. Instead of selling and crashing the price, these are held onto and used as a collateral to borrow against.
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#74It was all for charity. People are mean. https://twitter.com/The_Prologuist/status/158967849854920704...
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Re: FTX held less than $1B in liquid assets against $9B in liabilities
#75Earlier quoted context omitted.
Multisig, with hardware from different companies, no one of which could constitute a quorum of your keys. If you have even just a 2-of-3 keyset with one Ledger, one Trezor, and a Coldcard, none of those companies can screw you by itself. If you go up to 3-of-5, it's even more robust. You can set it up yourself using FOSS like Electrum. Or you can hire somebody like Casa[0] to get it all set up and set up the infrastr…
How do you create the Multisig?
Smart contract storing a vector of signer addresses, vector of votes and a staged transaction.
Each signer has to vote yes before the smart contract executes the staged transaction.
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#76Earlier quoted context omitted.
Multisig, with hardware from different companies, no one of which could constitute a quorum of your keys. If you have even just a 2-of-3 keyset with one Ledger, one Trezor, and a Coldcard, none of those companies can screw you by itself. If you go up to 3-of-5, it's even more robust. You can set it up yourself using FOSS like Electrum. Or you can hire somebody like Casa[0] to get it all set up and set up the infrastr…
The issue with hardware wallets that make them significantly risky is if you are storing wallets that contain any substantial amount of assets then it as risky as storing large sums of money in your house. If you lose that, it gets corrupted or destroyed then you've just lost those assets. There are pros and cons vs having a password-protected file that you can at least backup to whatever devices you decide.
That's not the issue. You can destroy the hardware wallet. All you need to keep is the seed phrase.
The issue is that the hardware wallet could be malicious. A malicious hardware wallet has multiple ways to put your funds at risk.
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#77Earlier quoted context omitted.
How do you create the Multisig?
Smart contract storing a vector of signer addresses, vector of votes and a staged transaction. Each signer has to vote yes before the smart contract executes the staged transaction.
And you do that with pencil and paper?
If you use software by a 3rd party, we are back to squear one.
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#78There should be more discussion about how to store value without counterparty risk. Most people think it is as easy as ordering a hardware wallet, following the process the wallet software suggests and - hurray! - your keys, your coins! But it is not that easy. You also have to cut the wallet manufacturer and the software developer out of the loop. I have yet to see a description on how to safely create a wallet that…
I'd recommend a PNC checking account. Solves a lot of issues related to storing value without counterparty risk.
What if you’re not a US citizen?
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#79Earlier quoted context omitted.
Did you look at the precursor? They explicit address user verification of the hardware, right down to using simplified translucent PCBs for the keyboard etc. so you can see it hasn’t been tampered, and using an FPGA for the CPU so you know what the processor is doing.
Translucent material is a smokescreen. No user can verify if the wallet is really doing what it is supposed to do by looking at it.
What are you talking about? You can inspect both the hardware and software. If you can verify a ‘deterministic algorithm’, you can verify this.
Re: FTX held less than $1B in liquid assets against $9B in liabilities
#80Earlier quoted context omitted.
Smart contract storing a vector of signer addresses, vector of votes and a staged transaction. Each signer has to vote yes before the smart contract executes the staged transaction.
And you do that with pencil and paper? If you use software by a 3rd party, we are back to squear one.
Write the smart contract yourself and deploy it to the blockchain