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Solend seized $170M of user funds

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Re: Solend seized $170M of user funds

#111

Post by SergeAx »

PragmaticPulp wrote: post #7

One of the themes in pro-crypto writings has been the idea that as long as you “do your own research” then the bad things won’t happen on your chosen cryptocurrency. The prevailing idea (among pro-crypto spaces) is that bad things only happen to other people who deserve them because they didn’t do the right research. Recently we’re seeing the bad things happen in more and more mainstream chains. Even famous NFT propo…

NFT is just an URL pointing to CDN (or even S3) stored on the ledger, how one can "lose" it?

Re: Solend seized $170M of user funds

#112

Post by roenxi »

NikolaNovak wrote: post #97
cowtools wrote: post #61

Earlier quoted context omitted.

>The undeniable fact is that regulations will be put in place for crypto why is this so undeniable? I would think well-implemented cryptocurrencies would be fairly regulation resistant

Xkcd of course had it right even back when "crypto" meant something else :) https://xkcd.com/538/ Regulation and law indeed may not be able to beat crypto technologically. They don't need to. Humans are the weak squishy link in the chain. I don't need a supercomputer to crunch down your crypto, I need a warrant for your arrest or subpoena to ask for all your documents. I can outlaw your ability to operate without log…

> I can outlaw your ability to operate without logs.

Even going full Nazi, how do you enforce a law that technically challenging without bankrupting the government or crippling the economy? And what time-frame does it take to phase in?

Re: Solend seized $170M of user funds

#113

Post by AdrianEGraphene »

cowtools wrote: post #45
tatertots1234 wrote: post #23

Earlier quoted context omitted.

Most of the things that cause these problems, like stolen apes, would not work on Bitcoin as it lacks smart contract functionality.

Bitcoin has some scripting[0] functionality, and its non-fungibility[1][2] can facilitate NFT-like colored coins[3][4] [0] https://en.bitcoin.it/wiki/Script [1] https://en.bitcoin.it/wiki/Fungibility [2] https://sethforprivacy.com/posts/fungibility-graveyard/ [3] https://en.wikipedia.org/wiki/Colored_Coins [4] https://www.youtube.com/watch?v=889JSfIaPzs

Colored coins is one of my #1 favorite topics! The same issue (high fees) that plagued ETH would soon arise if doing "Colored Coins" for NFTs on BTC. Regardless, this could certainly be done. Colored coins was actually one of the 1st concepts that seriously drew my interest to this space.

One might think Lightning Network would be a good solution, but LN is fungible, so that wouldn't work.

Still, colored coins is an awesome concept and I'm planning to help with at least 1 use-case (fingers crossed!) in the next few months.

Re: Solend seized $170M of user funds

#114

Post by colinsane »

potatototoo99 wrote: post #37
55555 wrote: post #9

Sorry, I've read this again and now I think this has little to do with Solana and entirely to do with Solend, and I think they're separate. Maybe someone who knows more about the space can clarify things. I now presume the funds needed to be deposited in Solend's smart contract in order for the trader to borrow the funds against his collateral, and Solend is pushing a patch in order to modify the code so they can sei…

I'm only surprised why would the Solend team care about crashing the price of Solana. Why would the Solana care either for that matter (I don't know if they are the same people though). If it crashes because of a sudden bulk market liquidation then it is just working as intended, and eventually the price of SOL will recover if there is user confidence.

whale has put up $170M of SOL and borrowed $100M of USD. that USD was supplied by other people on Solend who expect to be repaid. “liquidation” is a way to ensure those lenders are repaid: if the borrower no longer has enough collateral to be incentivized to pay back the loan — or rather before that happens — liquidators will recover the lenders’ money by seizing the borrower’s collateral, selling it on the market, and returning the USD proceeds to the lenders.

the worry about SOL price drop is: can this $170M of SOL really be sold to make the lenders whole of their $100M USD? or will SOL significantly drop as that trade is executed and the lenders can only recover (say) half that?

most lending platforms place a cap on the total amount of each type of collateral they’ll accept — in large part to protect against these liquidation scenarios. it looks like there’s worry that Solend was too lax with their cap.

Re: Solend seized $170M of user funds

#115

Post by laweijfmvo »

yieldcrv wrote: post #98
laweijfmvo wrote: post #43

Earlier quoted context omitted.

> This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted. I'm trying to understand this, but it's beyond me. Can someone ELI5? Here's what I get: Someone borrowed $108M (in USDC and USDT) and put up 5.7M SOL ($170M USD) as collateral, with the terms that if SOL should fall the lender can liquidate the SO…

> Question: who's making this claim and on what basis? The Solend Team. https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxP... > Question: why is allowing this liquidation the end of the world? Its not. They believe a function in their own project will cause the underlying Solana blockchain to have some uptime issues, because a similar function has been a culprit in the past, according to them. (Solana has f…

> Its not Solend's problem.

Right, that's my confusion. Which is what makes the whole thing smell fishy.

Re: Solend seized $170M of user funds

#116

Post by ethbr0 »

cowtools wrote: post #105
NikolaNovak wrote: post #97

Earlier quoted context omitted.

Xkcd of course had it right even back when "crypto" meant something else :) https://xkcd.com/538/ Regulation and law indeed may not be able to beat crypto technologically. They don't need to. Humans are the weak squishy link in the chain. I don't need a supercomputer to crunch down your crypto, I need a warrant for your arrest or subpoena to ask for all your documents. I can outlaw your ability to operate without log…

Go ahead, unlock your hard drives then. Disable HTTPS, it makes no difference right? The government can just do evil maid attacks while you're asleep or rubber-hose whatever CA you're using anyways. While you're at it, why don't you leave the door to your house unlocked? The government can just kick it in whenever they want, no biggie, right? Strong cryptography still remains a formidable barrier for law enforcement,…

Munroe isn't a pessimist: he's a humorist.

Re: Solend seized $170M of user funds

#117

Post by colinsane »

Melting_Harps wrote: post #13
baq wrote: post #5

defi at its best. zero upside of centralized finance with all the downsides, after all.

> defi at its best. zero upside of centralized finance with all the downsides, after all. DeFi definitely over promised, and under delivered: the part that I take issue with is why build these tools on centralized alt currencies? I mean if you think NFTs are the extent of DeFi (much of which is what web3 hinged on) than this was predictably going to fail just like the ICO craze did. Smart contracts based on oracles a…

> the part that I take issue with is why build these tools on centralized alt currencies?

because the decentralized cryptocurrencies are expensive to transact with — because many people, like you, strongly prefer to use the decentralized ones and so pay a premium to do so.

Re: Solend seized $170M of user funds

#118

Post by vkou »

yieldcrv wrote: post #103
cuteboy19 wrote: post #91

Earlier quoted context omitted.

Admin keys?

A lot of "decentralized finance" projects have a way for a centralized entity to control them. Often times an individual. And other times a multisignature address controlled by two of the same individual's addresses. Users should be more discerning but are not.

You can't, and don't have time to be discerning if you want to 'get rich quick' during a bull market in an ecosystem that produces nothing of value.

Re: Solend seized $170M of user funds

#119

Post by nemothekid »

cowtools wrote: post #105
NikolaNovak wrote: post #97

Earlier quoted context omitted.

Xkcd of course had it right even back when "crypto" meant something else :) https://xkcd.com/538/ Regulation and law indeed may not be able to beat crypto technologically. They don't need to. Humans are the weak squishy link in the chain. I don't need a supercomputer to crunch down your crypto, I need a warrant for your arrest or subpoena to ask for all your documents. I can outlaw your ability to operate without log…

Go ahead, unlock your hard drives then. Disable HTTPS, it makes no difference right? The government can just do evil maid attacks while you're asleep or rubber-hose whatever CA you're using anyways. While you're at it, why don't you leave the door to your house unlocked? The government can just kick it in whenever they want, no biggie, right? Strong cryptography still remains a formidable barrier for law enforcement,…

>Go ahead, unlock your hard drives then. Disable HTTPS, it makes no difference right?

In what world is the Government your only threat?

Re: Solend seized $170M of user funds

#120

Post by renewiltord »

yieldcrv wrote: post #100
renewiltord wrote: post #26

Earlier quoted context omitted.

They don't have voting rights because they don't have SOL. They don't have SOL because they put it in there to get USDC+USDT. If they don't believe in the depth of the SOL/USD(C|T) books this could just be a way to sell SOL or go short SOL. This whale is probably just happy to default on the loan and get liquidated at this point.

I think SLND (Solend) is the token involved in voting rights here.

Ah, my mistake. Thanks for correction.
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