BlockFi files for bankruptcy as FTX fallout spreads
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Re: BlockFi files for bankruptcy as FTX fallout spreads
#2> At the start of the year, there were three big North American retail crypto lenders. Now all three are bankrupt.
Re: BlockFi files for bankruptcy as FTX fallout spreads
#3With projects like blockfi, users get all the disadvantages of the centralized traditional financial system without any of the regulatory protections that have built up over centuries. Terrible for the people with assets in blockfi but extremely predictable. The point of defi is that you can use financial services without a centralized counterparty. People who can’t handle their own keys should be using traditional banks, at least until the technology is improved. Compare to Aave and other actually decentralized lending protocols which are not at risk of bankruptcy.
Re: BlockFi files for bankruptcy as FTX fallout spreads
#4Seems to be in the 1-10 billion USD range for assets and liabilities according to the bankruptcy filings (https://twitter.com/web3isgreat/status/1597256105373073409), so not a small company.
Re: BlockFi files for bankruptcy as FTX fallout spreads
#5> A representative from BlockFi did not immediately respond to requests for comment.
Well I am sure the "representative from BlockFi" made out just fine working for BlockFi. I wonder if all these failures will finally tag these crypto companies as ponzi schemes ? Then these people will face real consequences.
Re: BlockFi files for bankruptcy as FTX fallout spreads
#6With projects like blockfi, users get all the disadvantages of the centralized traditional financial system without any of the regulatory protections that have built up over centuries. Terrible for the people with assets in blockfi but extremely predictable. The point of defi is that you can use financial services without a centralized counterparty. People who can’t handle their own keys should be using traditional b…
Sure, but you can't use DeFi to trade fiat for crypto. You can use DeFi to trade crypto for crypto, or for crypto that pretends to be fiat.
Saying "centralised exchanges bad, DeFi good" misses the point that the main use case of centralised exchanges is not covered by DeFi.
Re: BlockFi files for bankruptcy as FTX fallout spreads
#7With projects like blockfi, users get all the disadvantages of the centralized traditional financial system without any of the regulatory protections that have built up over centuries. Terrible for the people with assets in blockfi but extremely predictable. The point of defi is that you can use financial services without a centralized counterparty. People who can’t handle their own keys should be using traditional b…
What's the cryptocurrency endgame? Everyone has keys in cold storage waiting for the day we have the mathematics that destroys them?
Re: BlockFi files for bankruptcy as FTX fallout spreads
#8> A representative from BlockFi did not immediately respond to requests for comment. Well I am sure the "representative from BlockFi" made out just fine working for BlockFi. I wonder if all these failures will finally tag these crypto companies as ponzi schemes ? Then these people will face real consequences.
“Ponzi scheme” is a specific type of financial fraud and isn’t a synonym for overexposure, excessive leverage, poor management, or even fraud in general. I do not think labeling things as Ponzi schemes which are not Ponzi schemes is helpful. Nor do I understand how that would help with effecting “real consequences.” The consequences faced by company personnel should be consequent to any wrongdoing.
Re: BlockFi files for bankruptcy as FTX fallout spreads
#9For what it's worth, all reasonable people in the crypto space want regulation to make sure these types of poor lending practices don't continue. Regulators have been slow and ineffective when it comes to crypto, which has lent itself to the crypto v SEC narrative, but all the adults in the room known there is a need for some regulation.
Re: BlockFi files for bankruptcy as FTX fallout spreads
#10With projects like blockfi, users get all the disadvantages of the centralized traditional financial system without any of the regulatory protections that have built up over centuries. Terrible for the people with assets in blockfi but extremely predictable. The point of defi is that you can use financial services without a centralized counterparty. People who can’t handle their own keys should be using traditional b…
What's the cryptocurrency endgame? Everyone has keys in cold storage waiting for the day we have the mathematics that destroys them?
Currently in development is decentralized social recovery systems. A lite version of this already exists with gnosis safes where one wallet has multiple key holders and n/m voting.