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YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

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Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#201

Post by kgwgk »

IMTDb wrote: post #191
kgwgk wrote: post #188

Earlier quoted context omitted.

It wasn’t so obvious for some people… https://www.hbs.edu/faculty/Pages/profile.aspx?facId=697248 https://medium.com/terra-money/have-you-met-marco-216ca2a8b9... https://assets.website-files.com/611153e7af981472d8da199c/61... https://cdck-file-uploads-global.s3.dualstack.us-west-2.amaz... Why did you decide to join Terra? I thought Terra provided the perfect environment to apply what I learned in my research. Ensurin…

Those 3 reasons can be summarised as : "We are a bunch of excited 20yo who think they know better than everyone else and we have received pinky swear promises from shady asian websites, so we are definitely going to be rich, trust us ! xoxo"

That guy is at least 35 but he surely compensates the old age with lots of enthusiasm. After all, you don’t get a chair of royal garments innovation by pointing out that the king is naked.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#203

Post by dropnerd »

SilasX wrote: post #190
dropnerd wrote: post #119

Earlier quoted context omitted.

for context for others following along, Galois Capital went public with their criticism months before they started shorting. most people didn't listen. https://twitter.com/galois_capital

Was there a specific tweet you meant to link? That just goes to Galois’s profile page.

its months and months worth of tweets, and that's all they talked about during this year.

first a cryptic puzzle as a recruiting tool for analysts: https://twitter.com/Galois_Capital/status/148693793605468979...

followed by months of warnings like this: https://twitter.com/Galois_Capital/status/151217543903232819...

and threads pushing the systemic risk angle: https://twitter.com/Galois_Capital/status/150461116699529216...

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#204

Post by dragonwriter »

drekipus wrote: post #108
Mizza wrote: post #84

The name "StableGains" sounded exactly like "SafeMoon", a heavily advertised pump-and-dump shitcoin that, unsurprisingly, was not safe, and did not go to the moon. Free money with no risk sure sounds appealing though, just don't think too hard about it.

This is really the crux of the issue How many people get duped into thinking there's such a thing as "unlimited gain" and "rewards without risks" Like what, people are just going to give you money without you doing anything? It would be largely beneficial to everyone, if we were to provide some basic economic/financial/"how money works" lessons to everyone through the use of schools and public education..

> Like what, people are just going to give you money without you doing anything?

That's what a savings account is, essentially. The same thing with bigger numbers isn't immediately nonplausible to someone who doesn't understand the mechanics of what makes savings accounts nearly risk free and how that doesn't apply to the alternative.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#205

Post by JoeAltmaier »

drekipus wrote: post #108
Mizza wrote: post #84

The name "StableGains" sounded exactly like "SafeMoon", a heavily advertised pump-and-dump shitcoin that, unsurprisingly, was not safe, and did not go to the moon. Free money with no risk sure sounds appealing though, just don't think too hard about it.

This is really the crux of the issue How many people get duped into thinking there's such a thing as "unlimited gain" and "rewards without risks" Like what, people are just going to give you money without you doing anything? It would be largely beneficial to everyone, if we were to provide some basic economic/financial/"how money works" lessons to everyone through the use of schools and public education..

Um, how all the super-rich got that way. Interest, dividends, annuities, heck any financial instruments at all.

But sure, lets make it a moral good that we don't (get to) have money too. The 1% deserve all the money!

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#206

Post by saalweachter »

josu wrote: post #94
Asparagirl wrote: post #34

They’re just one of several shiny fintech apps/websites running the same scam, a modern two-and-twenty on a ponzi — but with really nice UI. Alice (alice.co / @alice_finance) is another prominent one that may have lost customer funds, which was also using the Anchor protocol. It’s unclear how much they lost, but it’s interesting that Do Kwon’s name is still an actual logo listed on their home page. And Vertex Protoco…

I publicly called out LUNA/UST on Twitter a few times a few months before the collapse [0] [1]. Just stating this so it's clear that I don't have any interest defending them. That being said, calling these platforms "ponzis" isn't correct, the most you can say is that they were front ends for a ponzi. It would be like setting up a front-end to receive investments, and then depositing the money with Madoff. I'm not sa…

> That being said, calling these platforms "ponzis" isn't correct

I feel like "ponzi" has become the "magazine/clip" derailer of crypto discussions.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#207

Post by mellavora »

hcks wrote: post #66
photon12 wrote: post #60

Earlier quoted context omitted.

There were funds that did due diligence and built out models of the Luna/Terra/Anchor ecosystem and realized it was unstable. You can talk to the people who built their models and they have lots of fun things to say about the ordeal.

Do you have any links / references regarding that? I'd like to read more

https://www.bloomberg.com/opinion/articles/2022-04-19/the-st...

> Here is how an algorithmic stablecoin works. You invent two tokens, call them Dollarcoin and Sharecoin. ... The process is sometimes compared to algorithmic central banking, where the central bank maintains the value of the currency (Dollarcoin) by adjusting its supply.

> On first principles this is insane.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#208

Post by MacsHeadroom »

headmelted wrote: post #98
Asparagirl wrote: post #34

They’re just one of several shiny fintech apps/websites running the same scam, a modern two-and-twenty on a ponzi — but with really nice UI. Alice (alice.co / @alice_finance) is another prominent one that may have lost customer funds, which was also using the Anchor protocol. It’s unclear how much they lost, but it’s interesting that Do Kwon’s name is still an actual logo listed on their home page. And Vertex Protoco…

The thing that has shocked me about all of this over the last year or so is how seemingly easy it is to just start issuing debit cards to people. Maybe there's more regulation than I realise (and the emperor has more layers of clothes than Joey Tribbiani), but I'm not seeing it. I assumed issuance of payment methods was much more strictly controlled than this due to the risk of contagion if the issuer can't meet it's…

There are multiple physical card APIs, costing around 50¢ + shipping to provision cards. All you need is a photo ID and e-signature to start issuing unlimited cards with any name stamped on them in less than 10 minutes.

Notably, these cards require online funds verification and settlement for every transaction. Some cards you might get through a bank or major card company may not, for convenience sake. But these cards do, for the obvious reason.

They're essentially pre-paid cards that load instantly (at the point of transaction) from a larger balance the dev/company controls.

There are even multiple APIs for creating card issuing APIs, checking account issuing APIs, etc. These have itemized pricing that looks more like AWS/GC/Azure pricing and are more complicated to use, in the same way AWS is more complicated than running everything on a single Digital ocean droplet.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#209

Post by JofArnold »

okwubodu wrote: post #30

The last few weeks (months, really) has highlighted an incredible lack of discernment in the VC-verse wrt the thing we call web3. Now. I have no experience doing what YC does and don’t claim to, but the jig here was so transparent that the smallest drop of “street smart” should’ve been enough to set off some alarms. We’re approaching a point where being passed over for “culture fit” is a compliment. Hopefully the emb…

VCs are unfortunately, on the whole, all too discerning when it comes to Web3. It's a meme now in the community that when a VC and tokens are involved, there's a good chance they are getting preferential treatment and using the end users as their exit liquidity. That's not necessarily the case here but "greed" has become a general theme and the motivations behind otherwise-puzzling investments become clear when viewed through that lens.

Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers

#210

Post by gitfan86 »

rsynnott wrote: post #143
josu wrote: post #94

Earlier quoted context omitted.

I publicly called out LUNA/UST on Twitter a few times a few months before the collapse [0] [1]. Just stating this so it's clear that I don't have any interest defending them. That being said, calling these platforms "ponzis" isn't correct, the most you can say is that they were front ends for a ponzi. It would be like setting up a front-end to receive investments, and then depositing the money with Madoff. I'm not sa…

> the most you can say is that they were front ends for a ponzi. It would be like setting up a front-end to receive investments, and then depositing the money with Madoff. This was absolutely a thing; most large Ponzi schemes have feeder funds. https://www.reuters.com/article/us-pwc-madoff-settlement-idU...

Indirection seems to be very valuable with scams. The 2008 housing crash had a lot of layers:

1. Loan Application (Borrower Lying about income) 2. Mortgage Originator ( Not validating loan application ) 3. Mortgage Back Security Creators ( Obfuscate what is in the security ) 4. Ratings Agencies ( Not being honest that step 3 happened ) 5. Sellers of MBS ( Not being honest that steps 1-4 exist )

I don't know enough about crypto to list out all the layers but I'm pretty sure I understand the first step:

1. Claim that underlying technology will be revolutionary just like the internet in a vague way that cannot be validated.

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