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The collapse of the IRON stable coin

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Re: The collapse of the IRON stable coin

#191

Post by rchaud »

tluyben2 wrote: post #89
ramesh31 wrote: post #86

Earlier quoted context omitted.

>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. Con artists are good at what they do. People are a thousand times easier to hack than a database server. And there's no security patches for human emotion; we are full of 10,000 year old zero days.

Agreed, but if you are a VC you do basic DD right? And if there is a reddit group calling your new star CEO a scammer, you might check a bit? But yes, full agree.

The basic DD that a crypto VC does is to figure out just how big the market for suckers is at this point in time.

Re: The collapse of the IRON stable coin

#192

Post by georgyo »

tigger0jk wrote: post #164
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.

Also, if the price of TITAN is 0, then you really can't pay out 25 cents worth of it... It does seem correct that the contract should handle such a case differently than just trying to pay you out UNDEFINED DIVIDE BY ZERO ERROR count of TITAN

You just hit the nail on the head. I did not think about that.

This is the true reason they needed to special case <=0.

Re: The collapse of the IRON stable coin

#193

Post by biztos »

ppeetteerr wrote: post #127

I have never read so much about nothing as I have when reading about some new coin. It's worse than a pyramid scheme. At least there, you end up with a decade-worth of skin cream.

I missed out on the unregulated ICO rush because I thought you had to, you know, develop a new blockchain technology for your new cryptocurrency, which is really hard, and I was busy.

Much later I learned all you had to do was copy and paste a Solidity program and then promote it.

Guess I dodged an ethical bullet in my ignorance, but still...

Re: The collapse of the IRON stable coin

#194

Post by bena »

sashimi-houdini wrote: post #39
hungryforcodes wrote: post #26

Earlier quoted context omitted.

Why bother -- it's so broken. We can just again, it makes way more sense.

But cryptocurrency's answer is usually not "how can we do better" but "how can we repeat the same mistakes in a shorter time span?"

A computer lets you make more mistakes faster than any other invention with the possible exceptions of handguns and Tequila. - Mitch Ratcliffe, 1992

1992.

The internet was the domain of colleges and government institutions. The Eternal September would begin one year later.

1992.

The Super Nintendo Entertainment System just came out to most of the world, with North America getting it the year before and Japan two years prior.

1992.

One whole year before Doom would come out.

1992.

Windows 3.1 when it was still a DOS shell was released.

We were beating our heads against 386 processors praying for 486s, hopefully with the math coprocessor so we could actually get something done.

Even then, we knew. And now it's nearly 30 years later and it's just as true then as it is today.

Re: The collapse of the IRON stable coin

#195

Post by crooked-v »

rank0 wrote: post #152
sva_ wrote: post #101

Earlier quoted context omitted.

Their docs state that there should be a max supply of 1 billion iron titan tokens[0]. But according to coingecko, there are over 27 trillion in circulation[1]. I think that's probably where the trouble started, and at that amount, I doubt they'll be able to get the price up. I may be totally wrong though, I heard about this project for the first time today. [0] https://docs.iron.finance/iron-finance-on-polygon/titan-…

> Their docs state that there should be a max supply of 1 billion iron titan tokens[0]. But according to coingecko, there are over 27 trillion in circulation[1]. How on earth does something like this happen?

Well, we can already see they screwed up a basic piece of code in the IRON smart contract, so is that really so surprising?

Re: The collapse of the IRON stable coin

#196

Post by Negitivefrags »

rmetzler wrote: post #146
leephillips wrote: post #96

Since the price is not an integer, this is not an “off-by-one” error. No? It was the common mistake of writing `>` when `>=` was intended.

What do you think would be a better name? I kind of agree with you, but then, since it would fit for integers, I can’t think of a better name and could live with some generalization of “off by one”. I’m not a mathematician but maybe something like “off by n; n -> lim 0”

Amoung my friends when we used to do ACM programming competitions we called it “Off by equals error” since it was actually a fairly common issue in those types of programs and it was useful to have a name for it.

“I think you are off by equals here”

Re: The collapse of the IRON stable coin

#197

Post by runbathtime »

tluyben2 wrote: post #87
runbathtime wrote: post #57

If a code error that was made that was supposedly 'dumb' wasn't caught that tells me the people behind this acted recklessly. This code error being described wasn't just dumb, it was catastrophic- locking up all the collateral. Is this collateral locked up forever, what would make Titan trade above 0? The code wasn't even audited, suggesting no care by the devs before release. Doing money transmission without a licen…

> Doing money transmission without a license is criminal offense Who did the transaction though? These people? The eth network? Was it considered money? And where? Do these people live there who did the transaction? I am not saying you are wrong but this 'war on X' attitude never was a great idea, it also does not work as it is not a singular entity that is to blame. It is a vast network spanning countries.

Ignorance or not understanding the money transmitter rules is not a defense.

Focus directly on the entity doing the money transmission in this case- the smart contract IRON. They take in USDC and give out IRON and TITAN. IRON and TITAN are money substitutes. Money transmission includes anyone by any means conducting exchange of one type of money for another. Functionally that is what this contract is doing. The code didn't write itself, there are people behind it that released it, and they wrote it to conduct money transmission (a specific purpose). You don't even need to bring ethereum into the conversation to prove they are in violation.

I'm not sure I understand your comment about 'war on X' but I think it is a problem when there is an arbitrary application of these laws and unfair dealing that we see by regulators within the crypto industry. Maybe this is natural (self interest), and maybe it isn’t entirely their fault (limited resources).

I saw a twitter thread from a lawyer saying the SEC doesn't determine if something is a security, the courts and congress do. Then why are we obsessed with the SEC’s opinion? I speculate that we just need court cases and we do not need the regulatory authority to bring the court case. Maybe that is the problem to solve.

Re: The collapse of the IRON stable coin

#198

Post by Paradigma11 »

rank0 wrote: post #152
sva_ wrote: post #101

Earlier quoted context omitted.

Their docs state that there should be a max supply of 1 billion iron titan tokens[0]. But according to coingecko, there are over 27 trillion in circulation[1]. I think that's probably where the trouble started, and at that amount, I doubt they'll be able to get the price up. I may be totally wrong though, I heard about this project for the first time today. [0] https://docs.iron.finance/iron-finance-on-polygon/titan-…

> Their docs state that there should be a max supply of 1 billion iron titan tokens[0]. But according to coingecko, there are over 27 trillion in circulation[1]. How on earth does something like this happen?

From the article:

"[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]"

Re: The collapse of the IRON stable coin

#199

Post by leephillips »

rmetzler wrote: post #146
leephillips wrote: post #96

Since the price is not an integer, this is not an “off-by-one” error. No? It was the common mistake of writing `>` when `>=` was intended.

What do you think would be a better name? I kind of agree with you, but then, since it would fit for integers, I can’t think of a better name and could live with some generalization of “off by one”. I’m not a mathematician but maybe something like “off by n; n -> lim 0”

I’m not sure. Since it is related to the distinction in mathematics between open and closed intervals (except on computers we have floats in instead of reals), maybe “interval error” or “endpoint error”. But not “bounds error”, of course.

EDIT: Or maybe “comparison error”. I like that the best. But calling it an off-by-one seems wrong, especially as what we usually mean by that is something more like not handling the last iteration of a loop correctly.

Re: The collapse of the IRON stable coin

#200

Post by Symmetry »

dh5 wrote: post #156
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?

Matt Levine had a great writeup about this: > If the price of IRON goes down from $1 (good) to $0.95 (bad), you just issue some TITAN (worth $65) to buy some IRON until it’s worth $1 again. And if IRON keeps going down, you just issue some more TITAN (worth $60) and buy more. And if IRON keeps going down … [you can fill in some more iterations here] … you just keep issuing TITAN (worth $0.000000035) and at that point…

Link to article: https://www.bloomberg.com/opinion/articles/2021-06-17/titani...
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