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The collapse of the IRON stable coin

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Re: The collapse of the IRON stable coin

#181

Post by nazgulnarsil »

tluyben2 wrote: post #73
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?

As I get older, I do not understand how known scammers, especially the ones that raise millions over and over, get support time and time again. If not in jail, why do they still get jobs. I know some who just told me in my face that they were scammers of millions (or simply were happy screwing people even with viable ways out) and they raise money again, screw people again etc. People do use Google right? Due diligen…

The basic way a con works isn't by presenting itself as not-a-con but by presenting you as being in-on-the-con. Lots of overlap there with semi-legit (though taking advantage of stupidity) companies.

Re: The collapse of the IRON stable coin

#182

Post by scyclow »

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 don't think people recognized it as parody, but no one took http://fastcashmoneyplus.biz seriously

Re: The collapse of the IRON stable coin

#183

Post by bena »

raziel2701 wrote: post #103
xqk8 wrote: post #82

Earlier quoted context omitted.

A Ponzi scheme requires a central actor like Charles Ponzi, you're quoting a description of a "purely algorithmic stablecoin" which implies no central actor to channel new investors' money to old, no central actor to defraud the new investors and by telling them they've gained money when they haven't. I guess they are comparable in the way that they both require a inflow of capital, is that what you're saying? That w…

I think we're splitting hairs with the definition, it's not a ponzi but it acts like a ponzi. It's a weird distinction I suppose, I personally have no qualms calling it a ponzi scheme because new money is needed to pay old money.

Forget "central actors" or whatever.

A ponzi scheme is a description of a certain type of fraud. We can reduce it to it being the fraud of claiming new capital as investor dividends. It's a little more complex, but at its heart, that's what you got to do.

If there is no lie about the source of the money, it's not technically not a ponzi scheme.

Re: The collapse of the IRON stable coin

#185

Post by meowface »

bena wrote: post #176
meowface wrote: post #13

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?

Here's a better question: Why? This is exactly what crypto-enthusiasts claim is going to happen to the US Dollar and I've never heard mention of crypto taking pity on fiat by offering to give them crypto when the bottom finally falls out of fiat. So why should anyone else be responsible for people who took a calculated risk that blew up in their face? Yes, this sucks for them. But this shit happens. Don't throw good…

>Here's a better question: Why?

A calculated risk is that you put money into something which may end up losing all of its value; not that your collateral becomes locked in a safe with an accidentally lost key. They had a reasonable expectation that even if the value was totally lost, they wouldn't have their collateral locked forever. Their investment, yes, but not their collateral.

Sure, one always has to account for extreme scenarios when doing anything, like the risk of a critical flaw in the code. But to give another extreme gambling scenario:

Let's say you put your car up as collateral for a huge gambling bet. You of course take a calculated risk that if you lose the bet, you lose your car. Then let's say you back out of the bet after putting up the collateral, or you even win the bet, but there was a mixup at the casino and they thought you lost the bet and they took your car without you realizing it and it's on another continent now.

In both scenarios, you hope that you can at least get some kind of compensation from the people you entrusted the collateral to, since it was just a complete fuckup on their part. You know you're not guaranteed to get anything, but I think it's reasonable to try to ask for compensation. If you just took a bet and the value plummeted, then you know it's tough luck for you and just a standard high-risk high-reward scenario that you ended up on the losing side of, but this is something else.

(At least if I'm understanding this properly and the collateral really was purely collateral. Seems to be a bit complicated because they were attempting to make a... stablecoin... pegged to an intentionally volatile asset, somehow.)

>This is exactly what crypto-enthusiasts claim is going to happen to the US Dollar

It's mostly just Bitcoin maximalists who think that, and they're a small subset of people who own Bitcoin. This is Binance Smart Chain (basically a copy of Ethereum), and I'm sure some BSC/Ethereum users believe something similar, but it's a much smaller percentage than even Bitcoin's small percentage.

Also, I don't think they think every dollar is secretly embedded with nanobots that'll encase the bill in titanium after someone at the Fed trips and falls on a big red button, which is what would be analogous to this. I think they think the dollar will lose most or all of its value due to hyperinflation. I think that's a completely unfounded belief based on an unfounded philosophy, but it's a different and entirely unrelated thing.

Re: The collapse of the IRON stable coin

#186

Post by shkkmo »

RaketenStadt wrote: post #174
shkkmo wrote: post #157

Earlier quoted context omitted.

> It requires a central actor I see exactly zero existing definitions of ”ponzi scheme” that mentions any "central actor" so you seem to be creating an entirely new definition purely to avoid the "ponzi scheme" label.

Then you didn't look at wikipedia which mentions "the con artist" and "the operator of the scheme" several times. If you're having to google the definition of the term maybe there's still a little more you need to learn about it.

I don't see either of those as at all synonymous with "central actor".

I would consider all the founders and early investors who knowingly promote the ponzi scheme as con artists.

I google the definition to charitably give your argument the benefit of the doubt. I don't see how you think phrases like the following make for effective communication or a strong argument:

> If you're having to google the definition of the term maybe there's still a little more you need to learn about it.

Re: The collapse of the IRON stable coin

#187

Post by shkkmo »

missblit wrote: post #167
shkkmo wrote: post #138

Earlier quoted context omitted.

I believe the point the poster was making is that "smart contract" is a misnomer and contracts comprised of code should be more realistically called "dumb contracts" since they lack the intelligence to understand and compensate for context and intent.

They really shouldn't be called contracts at all, since intent ("meeting of the minds") is a fundamental part of contract law. Imagine for example if a mortgage contract contained some bizarre inscrutable loophole that as-written would give the first 3rd party to notice it total control over over the house. This would of course be laughed out of court because that part of the contract wouldn't be enforcable under con…

> They really shouldn't be called contracts at all, since intent ("meeting of the minds") is a fundamental part of contract law.

That's a really good point. They are arguably neither "smart" nor "contracts". Maybe a better term is "automated blockchain agents" or something similar?

Re: The collapse of the IRON stable coin

#188

Post by rchaud »

juliansimioni wrote: post #170
bombcar wrote: post #55

> Non-collateralized stablecoins require continual growth to be successful. In the event of a price crash, there is no collateral to liquidate the coin back into, and the holder’s money would be lost, as seen with many past projects trying to utilize such design [sic]. Isn’t that just a Ponzi scheme?

No, much different: In a ponzi scheme, the perpetrators will not willingly directly reveal that it's a ponzi scheme. In cryptocurrency, the perpetrators are honest and transparent about it being a ponzi scheme, but surround it in so much techno-babble that they make it sound like a ponzi schme is what you WANT.

This is happening right now with the hilariously titled "SafeMoon" cryptocurrency. You can find posts on the subreddit openly asking people to buy a few million for $25 and 'gift' it to their friends and family.

Re: The collapse of the IRON stable coin

#189

Post by biztos »

toomuchtodo wrote: post #31
thebean11 wrote: post #28

Earlier quoted context omitted.

Are you saying the only time a contract is disputed is when the other party is evading the law? Nobody abuses the legal system to screw over people without enough resources to fight in court?

I'm saying the legal system takes authority. A smart contract doesn't avoid or override that authority. https://digitalchamber.org/wp-content/uploads/2018/02/Smart-... > Is A Smart Contract Always A Legal Contract? > No. Because a smart contract is computer code, a smart contract may represent all, part, or none of a valid legal contract under U.S. law. Smart contracts function – in whole or in part – to give effect…

> Smart contracts function – in whole or in part – to give effect to legal contracts.

Except when they don't, which is... most of the time?

It's true (and I would hope obvious) that a smart contract doesn't play like a legal contract, but aren't the vast majority of them intentionally doing things that are orthogonal to contract law?

Or irrelevant to it? You can buy Beeples all day but you still don't own a copyright, and this doesn't seem to be a problem for anyone.

Re: The collapse of the IRON stable coin

#190

Post by shkkmo »

jcrawfordor wrote: post #147
shkkmo wrote: post #124

Earlier quoted context omitted.

> Sure, but if you both sign a legal contract to obey the outcome of the smart contract then no one owes anything, You are begging the question by presupposing that for every smart contract there could be a possible legal contract that can bind the people who sign it to the results of the smart contract. If a smart contract is illegal, then any written contract that binds people to the results of that contract would…

Contracts can be unenforceable for reasons that might not be obvious to people who don't do contract law, as well. For example, the concept of consideration is not especially obvious, that contracts are often not enforceable if both parties do not receive consideration, which leads to things like peppercorn payments. I know about that as a layman but a contract attorney would know of many more non-obvious things that…

Yeah, consulting a lawyer before drawing up an important contract is usually a very good idea for precisely these reasons. You can probably make small adjustments to a boilerplate without doing so, but that always adds atleast a little risk.
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