Basically they’re just using their own money and leveraging 2x. Does that sound about right?
Yes it's literally just leveraging
Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
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Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#42Crypto people discovering leverage and accounting, news at 6. I have $1 asset. I have $2 asset and $1 loan. I have $3 asset and $2 loan.
Yes they have been doing this since Ethereum existed. Maybe it's HN discovering this achievement, considering crypto people are explaining very basic functionality to this website's community
Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#43Earlier quoted context omitted.
It's definately not a zero-sum system
You can make an argument that the economy as a whole is not a zero-sum system, but money markets certainly are.
It’s zero-sum when the game ends because there are no more buyers. That hasn’t happened yet. We don’t know how much more money will be spent on Ethereum or who the buyers will be. We don’t know how much they will win or lose.
If it’s zero-sum but we don’t know how many terms are being summed or their values, then we can’t do the math and the equation isn’t very useful for making predictions.
Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#44Good for them if they manage to convert those imaginary numbers to actual money. With actual I mean real world money with which you can pay your bills, taxes etc, not the funny internet money.
It's still a Ponzi. And writing about this thing in the same terms as legitimate financial trades will not change the fact that it's all a meaningless charade by habitual gamblers.
Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#45Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#46tl;dr traders leveraged for a 4% gain (3 billion in assets for 120 million in returns according to the article). Not really news.
Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#47Wouldn't a sane individual cash it in and retire at that point? Even cashing 1/2 of it would pay for pretty much any lifestyle a person might want...
Those accounts might not belong to individuals.
Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#48So who lost $120M? This is a zero-sum system.
It's not a zero sum system. There are capital inflows.
Who loses are people who voluntarily sell. They think they're making a good decision, so does the counterparty, and only time will tell. Every deal you make with someone is both of you doing something you perceive as in your best interest. Speculative investment particularly is a high risk game. Often, it is a good decision on both parts, because peoples needs differ.
Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#49Earlier quoted context omitted.
Yes it's literally just leveraging
it's recursive leveraging using multiple different market makers that are giving you further leveraged bets on already leveraged assets
> it's recursive leveraging using multiple different market makers that are giving you further leveraged bets on already leveraged assets
This is approximately what Bill Hwang was indicted for doing [1].
[1] https://www.wsj.com/articles/archegos-founder-and-cfo-charge...
Re: Two Ethereum DeFi traders just made $120M using a strategy called 'looping'
#50Earlier quoted context omitted.
You can make an argument that the economy as a whole is not a zero-sum system, but money markets certainly are.
It’s zero-sum when the game ends because there are no more buyers. That hasn’t happened yet. We don’t know how much more money will be spent on Ethereum or who the buyers will be. We don’t know how much they will win or lose. If it’s zero-sum but we don’t know how many terms are being summed or their values, then we can’t do the math and the equation isn’t very useful for making predictions.
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