Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The collapse of the IRON stable coin

irony-97882.medium.com

Post reply on HN
Print view View original

11–20 of 502 posts

Re: The collapse of the IRON stable coin

#11

Post by onepointsixC »

gruez wrote: post #9

This is good for USDC right? Because it's $262 million that they don't have to pay back? >EDIT: I’ve since learned that the developer(s?) behind this are already the laughing stock of the DeFi community, having wrecked each of their 3 previous projects (now 4) — though this might be their biggest hit yet And people poured $262 million into this?

They poured 1.33 X $262M at the very least as the stuck USDC was 75% of the collateral that still remains. But apparently a lot more than that even was poured in, in the first place.

Re: The collapse of the IRON stable coin

#12

Post by toomuchtodo »

thebean11 wrote: post #7
georgyo wrote: post #5

This has always been the problem with smart contracts. They are infact dumb contacts. To program one you need to think about all the edge cases. The programmers here likely did want >0 here. The possibility that the thing feeding price data return zero incorrectly was higher than the price legitimately being zero in their minds. There is no court or lawyer who can interpret the spirit of the contract.

> There is no court or lawyer who can interpret the spirit of the contract. That's obviously the point, though. You are trading one set of risks for a completely different set of risks that might suit your use case much better; your counterparty being able to contest a contract in court could very well be a "bad" thing for you.

> your counterparty being able to contest a contract in court could very well be a "bad" thing for you.

Evading the law (whether the court or a regulatory body such as the SEC [civil] or DOJ [criminal]) is typically a "bad thing" for the person or people intending to or successfully doing so.

https://www.sec.gov/spotlight/cybersecurity-enforcement-acti... (SEC Cyber Enforcement Actions, control-f "blockchain" | "crypto")

https://www.ropesgray.com/en/newsroom/alerts/2021/March/The-... (The CFTC Signals New Era in Enforcement of Cryptocurrency Trading with Action Against Antivirus Software Pioneer John McAfee)

https://www.jdsupra.com/legalnews/doj-activity-on-cryptocurr... (DOJ Activity on Cryptocurrency: A Six-Month Review)

https://www.reuters.com/world/us/us-court-authorizes-irs-see... (U.S. court authorizes IRS to seek identities of taxpayers who have used cryptocurrency)

Re: The collapse of the IRON stable coin

#13

Post by meowface »

Probably a dumb question, but is there any possibility of temporarily getting the price to slightly above 0 in order to let people get their money out? For example, could some group with a lot of money offer to buy/sell a bit until the oracle considers it above 0, in exchange for some sort of compensation from the investors or devs?

Re: The collapse of the IRON stable coin

#14

Post by jrickert »

sashimi-houdini wrote: post #8

I wrote Skepticoin as a serious parody of Bitcoin. Articles like these about the "state of the art" of cryptocurrency make me wonder: would a parody of a more "modern" cryptocurrency even be recognizable as such?

This brings to mind Poe's Law (that on the Internet, any sufficiently advanced satire is indistinguishable from reality), so I would think not.

Re: The collapse of the IRON stable coin

#16

Post by xyzzy123 »

thebean11 wrote: post #7
georgyo wrote: post #5

This has always been the problem with smart contracts. They are infact dumb contacts. To program one you need to think about all the edge cases. The programmers here likely did want >0 here. The possibility that the thing feeding price data return zero incorrectly was higher than the price legitimately being zero in their minds. There is no court or lawyer who can interpret the spirit of the contract.

> There is no court or lawyer who can interpret the spirit of the contract. That's obviously the point, though. You are trading one set of risks for a completely different set of risks that might suit your use case much better; your counterparty being able to contest a contract in court could very well be a "bad" thing for you.

Some chains/coins are backed and developed by fairly well defined "legal entities" (presumably for reasons related to securities law). I am waiting with popcorn in hand for the day someone loses money via smart contract and then takes the entity behind the chain to court to overturn it.

(We've seen disastrous bugs overturned by community-consensus hard fork but not to my knowledge by court order). Not yet, but it seems inevitable.

Re: The collapse of the IRON stable coin

#17

Post by shadowgovt »

frgtpsswrdlame wrote: post #3

Interestingly Mark Cuban got taken for a small amount of money by this and is already calling for regulation around stablecoins: https://www.bloomberg.com/news/articles/2021-06-17/mark-cuba... I read about it. Decided to try it. Got out. Then got back in when the TVL start to rise back up As a percentage of my crypto portfolio it was small. But it was enough that I wasn't happy about it. But in a larger context it is…

Hypothetically, what he's suggesting may not even need to be government-backed.

An independent auditor, with reputation on the line, could, for a fee, offer independent coin analysis and risk assessment. Perhaps something similar to the Underwriters Laboratories model... knowing a coin was "Coincheck-certified" or something could give similar confidence to knowing the UL sticker on a lamp means it's a bit less likely to burn your house down.

Re: The collapse of the IRON stable coin

#18

Post by meowface »

sashimi-houdini wrote: post #8

I wrote Skepticoin as a serious parody of Bitcoin. Articles like these about the "state of the art" of cryptocurrency make me wonder: would a parody of a more "modern" cryptocurrency even be recognizable as such?

I can't imagine it'd be possible. There're a whole lot of Andy Kaufman-esque / kayfabe / "the most entertaining outcome is the most likely" things going on.

Literally no conceivable parody could work as an actual parody, I think. There are coins people are getting rich off of with names and logos like "Pregnant Butt", "CumRocket", racial slurs, etc.

There's absolutely no doubt in my mind that if it hasn't already happened, coins named "Scamcoin", "Rugcoin", "Ponzicoin", "This is a scam coin, please ignore", "If you invest in this you will lose all of your money and be the laughingstock of your friends, family, and communitycoin" could probably quickly reach million/billion-dollar market caps.

You could make a token with a smart contract which self-destructs itself at a random time, and explicitly disclose this fact, and it'd still probably get a huge market cap and retain it up until the day it explodes. Or you could make one that does this, don't disclose the fact, have millions of dollars flow in without a single person ever looking at the code, and get the same result. (Doesn't matter if you do or don't publish the verified source code; if you do, no one will look at it, and if you don't, no one will notice/care that you didn't before investing their life savings in it.)

Poe's law doesn't even quite describe it, because it's not that you can't distinguish between parody and sincere absurdity. There's just no difference between the two in terms of actual real-world outcome. Whether you make an intentionally or unintentionally terrible coin, and whether or not you're open about it and whether or not people are aware of it, it's still going to receive a ton of investment.

And it pretty much makes sense why this is and will be the case (unless the US government starts cracking down). People are buying because they find it entertaining and think other people will find it entertaining and buy and that they'll think other people will find it entertaining and buy, etc. And then they just wait until their initial investment multiplies a bit and they try to get out before the inevitable collapse. It's a fast-paced psychological arcade game. In some sense it's a distillation of Wall Street to its purest essence, for better and worse.

Re: The collapse of the IRON stable coin

#19

Post by hi5eyes »

sashimi-houdini wrote: post #8

I wrote Skepticoin as a serious parody of Bitcoin. Articles like these about the "state of the art" of cryptocurrency make me wonder: would a parody of a more "modern" cryptocurrency even be recognizable as such?

bitcoin is a parody of itself

completely unusable as a currency, even maximalists cant seriously tell people to use it as such. "cryptocurrency" at this point means less useful than any currency in any mmo

Re: The collapse of the IRON stable coin

#20

Post by jayd16 »

georgyo wrote: post #5

This has always been the problem with smart contracts. They are infact dumb contacts. To program one you need to think about all the edge cases. The programmers here likely did want >0 here. The possibility that the thing feeding price data return zero incorrectly was higher than the price legitimately being zero in their minds. There is no court or lawyer who can interpret the spirit of the contract.

Hmm. I don't think this is the first legal contract of ambiguous intent. Surely any court would decide what the proper reading is and rule in some direction.
Post reply on HN