Crypto lending company Babel Finance halts redemptions and withdrawals • Hacker News Board

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#121

Post by capableweb » Fri, Jun 17, 2022, 1:09 PM UTC

jtode wrote: post #118

Barrera wrote: post #98

This article gives some context, including this: > At the end of 2021, Babel Finance had an outstanding loan balance of over $3 billion, up from $2 billion the previous February. It averaged $800 million in monthly derivatives trading volume and had structured and traded over $20 billion in options products. https://www.coindesk.com/business/2022/06/17/babel-finance-s... The ripple effects here are going to be substa…

Quoted post unavailable.

> Banks are backed by the fed so runs don't happen. They did that after the great depression, along with a lot of those pesky regulations, when people were sick to hell of bank runs happening every few years.

Bank runs definitely still happen. Maybe not in the US, but in other countries they do. Latest example was in Russia when the announcement of the removal of Russian banks from SWIFT. Bank runs also happened in Greece, Canada, Bulgaria, Argentina and more, just in the 2000's.

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#122

Post by aaaaaaaaaaab » Fri, Jun 17, 2022, 1:09 PM UTC

giaour wrote: post #109

lifty wrote: post #45

Question for the crypto skeptics of HN. Do you think this cycle the whole crypto space goes down the drain never to be heard of again? Do you think the whole space is a fad or do you think there are patches of values underneath the froth? How do you see the space evolving? Thanks!

I believe we're seeing the end of "retail crypto." Just like agricultural futures, crypto will continue to exist but will mostly be known outside of institutional trading as a good way to lose your shirt. As far as underlying value goes: one thing we've learned from the constant scamming is that a protocol designed for trustless interactions will inevitably devolve into purely adversial interactions. Consider it a so…

>Central banks, multinational corporations, and others who can afford to marshal the resources to perform extensive audits will probably use smart contracts on a proof-of-stake chain for large, adversarial transactions

Arbitration at the highest echelons of power is done with weapons. I don’t give a shit about what your blockchain says when I can force you to the negotiating table Commodore Perry style.

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#123

Post by sdze » Fri, Jun 17, 2022, 1:09 PM UTC

I personally enjoy regulated banking very much :-) With boring central banks and banks that are heavily stress-tested and regulated.

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#124

Post by giaour » Fri, Jun 17, 2022, 1:11 PM UTC

capableweb wrote: post #111

SketchySeaBeast wrote: post #102

Earlier quoted context omitted.

The internet had obvious and wide ranging use cases that were immediately apparent to everyone. Blockchain tech has at best a series of edge case applications for record keeping. I don't think they are comparable at all.

> The internet had obvious and wide ranging use cases that were immediately apparent to everyone In hindsight it might seem so, but it really wasn't. Most people who didn't already see these "wide ranging use cases" thought the internet was mostly about shady stuff.

I was young at the time, but this doesn't match my recollection. Everybody thought businesses whose value was measured in "eyeballs" were scams, but the internet was well established in industry, government, and academia.

Yahoo and Amazon didn't look fundamentally different from Pets.com to me at the time, but they managed to survive.

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#125

Post by kwertyoowiyop » Fri, Jun 17, 2022, 1:11 PM UTC

Jorge1o1 wrote: post #19

mousetree wrote: post #2

I found it amusing that this notice says "Due to the current situation, Babel Finance is facing unusual liquidity pressures" and their homepage says "Seeking Certainty in Uncertainty".

Naming your company after a failed experiment is also an ironic choice. What’s next… Icarus Investments?

FoolMeOnce Holdings?

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#126

Post by tluyben2 » Fri, Jun 17, 2022, 1:12 PM UTC

Tesl wrote: post #84

icu wrote: post #71

Earlier quoted context omitted.

Sure I get that, but I'm old enough to remember the .com crash carnage and people saying that the web was a total waste of time etc and look how wrong they were. I think that the future is a probability distribution, and there is a non-zero probability that crypto doesn't die but keeps growing. Therefore, I'm not all in, but I'm not all out.

I was there too and basically nobody said that. Crypto being "like the early internet" and "people said that the web was a waste of time too!" are the biggest crypto lies ever told and repeated. Absolute whoppers.

There were definitely a lot of people saying that, usually after losing a lot of money with crazy investments that 'could not fail'. On actual 9/11 (that's why I remember it very well; during the meeting the CEO's secretary came in and told about a large attack on the US), I was at a large Dutch client of ours who said they will cancel all internet projects and move back to Windows only software. The CEO had lost millions listening to his accountants and investing in World Online [0] and had no faith anymore this 'web thing' would go anywhere. A large insurer who also was our client, scrapped the webbased employee benefits project they started in 1999 in favour of a Windows client.

[0] https://en.wikipedia.org/wiki/World_Online#Post_IPO

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#127

Post by gonzo41 » Fri, Jun 17, 2022, 1:13 PM UTC

If my bank withheld my withdrawals of my money, I'd not behave the most even tempered way.

Whilst I DO think crypto is a scam, or at best a very terrible waste of time and effort from all involved. I will accept that I could be wrong.

But, scam or not, this early turbulent history will cement a stigma of crypto being synonymous with grifters and scammers. I don't see a future in it.

It'll be interesting to see if btc breaks through the 20k barrier today and what effect that has on the hype.

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#128

Post by youessayyyaway » Fri, Jun 17, 2022, 1:14 PM UTC

tenpies wrote: post #82

icu wrote: post #33

My biggest takeaway right now is to study the crypto firms and projects that are having trouble as a way to abstract what red flags to look for. For example, with Terra the abstraction was that pegs don't work as we've seen many a time, especially when Soros broke the BoE. I took a small bath with my Terra holding and life goes on. I can do that because I didn't use leverage, I can lose everything I put into crypto,…

Another fantastic metric: compare the returns for storing or staking your crypto with them to the current sovereign interest rates. Is it offering Argentina/Turkey returns? Then they're probably the Argentina and Turkey of crypto.

Rate of return is a remarkably good metric for identifying scams.

If they offer more than ~12.5%, run away. Avast, ye salty dogs: a piece o' eight ain't worth losing yer shirt over.

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#129

Post by zeven7 » Fri, Jun 17, 2022, 1:14 PM UTC

icu wrote: post #85

bhaak wrote: post #53

Earlier quoted context omitted.

Terra was no stable coin. It was pointed out constantly that it can't work as an algorithmic stable coin. But the shill army was strong. There's an even easier metric for measuring crypto project. The bigger and dumber the shill army the more shady the project.

Thanks for your comment. Any chance you could please point me to the sources that constantly pointed out it wouldn't work?

If you're looking for a place with a community you can ask about those things I recommend, /r/ethfinance. I decided against using Celsius after asking around about it there. There's also been good discussion about what makes a good stablecoin over the years. Hint: Stables like DAI are a completely different thing from what Terra was.

Re: Crypto lending company Babel Finance halts redemptions and withdrawals

#130

Post by O__________O » Fri, Jun 17, 2022, 1:14 PM UTC

DannyBee wrote: post #112

O__________O wrote: post #64

Earlier quoted context omitted.

Blockchain, cryptocurrencies, DAO, etc — are here to stay. Even with the market as is, today it’s still a trillion dollar industry.

This argument is always very funny to me. History is rife with hundred-billion dollar industries destroyed in very short periods of time, across multitudes of field types. For example, i've watched fields created by single legal opinions, grow to many billions, and then get destroyed overnight by a different legal opinion. All in the course of 10-15 years. The amount of money in it is just not a sufficient condition…

Do you actually have specific notable (and comparable) examples of technology based industries that reached relatively the order of magnitude crypto has that were rapidly killed off?

Otherwise, as is, your response to me is without merit.