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Solend seized $170M of user funds

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Re: Solend seized $170M of user funds

#211

Post by fny »

jimmydorry wrote: post #183
fny wrote: post #141

Earlier quoted context omitted.

Modern finance is much better at handling fraud. Insurance exists, and recourse also exists since anonymity is not a requirement. Decentralized finance has thus far been demonstrably worse than everything in modern finance. It's illiquid, transaction costs are higher, full of scams, buggy, and recourseless. The whole space needs to grow up fast.

Try wiring someone money and see how helpful your bank will be at reversing that transaction. The vast majority of people losing money in the crypto world are the equivalent of people installing sketchy extensions in the early days of the internet that perform attacks on unsecured online banking portals. That this doesn't happen more often against banks is largely a function of the gated-ness of browsers and that tar…

I actually have had a wire rejected due to fear of fraud before.

Re: Solend seized $170M of user funds

#212

Post by rkagerer »

fny wrote: post #141
3a2d29 wrote: post #25

Earlier quoted context omitted.

Not to be super “arm chair psychologist” about this, but I always thought the whole “you deserve it if you got scammed” mentality comes from the people that believe crypto will replace all modern finance. For crypto to replace modern finance, it needs to be better in every way (so it’s a total replacement). Decentralized currency is better for some things, worse for things like preventing scams. If modern finance pre…

Modern finance is much better at handling fraud. Insurance exists, and recourse also exists since anonymity is not a requirement. Decentralized finance has thus far been demonstrably worse than everything in modern finance. It's illiquid, transaction costs are higher, full of scams, buggy, and recourseless. The whole space needs to grow up fast.

Insurance just taxes the risk onto everyone, which isn't a universally desirable feature.

Re: Solend seized $170M of user funds

#213

Post by jimmydorry »

klodolph wrote: post #202
jimmydorry wrote: post #183

Earlier quoted context omitted.

Try wiring someone money and see how helpful your bank will be at reversing that transaction. The vast majority of people losing money in the crypto world are the equivalent of people installing sketchy extensions in the early days of the internet that perform attacks on unsecured online banking portals. That this doesn't happen more often against banks is largely a function of the gated-ness of browsers and that tar…

Most people do not wire money, they transfer money through some other mechanism that has fraud protection. For example, if you buy something on eBay and the seller sends you a brick packed in a cardboard box instead, you dispute the charge on PayPal and most likely get your money back. Or suppose that some pissed off hotel clerk decides to charge your credit card for made-up damages during your stay in a hotel. My ex…

And most people do not use crypto? I don't see how the comparison to payment processing companies built on-top of the financial infrastructure is relevant, when bare-metal level of crypto acts most like wiring / transfering money between banks.

And no, a wire transfer or intra-bank transfer is typically not reversed. Even for big-names, like Linus, it is not so simple and requires personal connections with industry insiders to even get simple cases of fraud reversed.

[1] https://twitter.com/swiftonsecurity/status/15121875924140523... He mentioned it in his long WAN VODs, so there isn't a nice source to link to

Re: Solend seized $170M of user funds

#214

Post by jimmydorry »

fny wrote: post #211
jimmydorry wrote: post #183

Earlier quoted context omitted.

Try wiring someone money and see how helpful your bank will be at reversing that transaction. The vast majority of people losing money in the crypto world are the equivalent of people installing sketchy extensions in the early days of the internet that perform attacks on unsecured online banking portals. That this doesn't happen more often against banks is largely a function of the gated-ness of browsers and that tar…

I actually have had a wire rejected due to fear of fraud before.

As soon as that wire is fired off, it isn't coming back. It sounds like your bank is on the ball, and is erring on the side of more false positives than false negatives.

Re: Solend seized $170M of user funds

#215

Post by klodolph »

jimmydorry wrote: post #213
klodolph wrote: post #202

Earlier quoted context omitted.

Most people do not wire money, they transfer money through some other mechanism that has fraud protection. For example, if you buy something on eBay and the seller sends you a brick packed in a cardboard box instead, you dispute the charge on PayPal and most likely get your money back. Or suppose that some pissed off hotel clerk decides to charge your credit card for made-up damages during your stay in a hotel. My ex…

And most people do not use crypto? I don't see how the comparison to payment processing companies built on-top of the financial infrastructure is relevant, when bare-metal level of crypto acts most like wiring / transfering money between banks. And no, a wire transfer or intra-bank transfer is typically not reversed. Even for big-names, like Linus, it is not so simple and requires personal connections with industry i…

I don’t see how “most people don’t use crypto” is at all germane to the discussion. Of course most people don’t use crypto—it’s kinda new. No other explanation is needed.

At the end of the day, what I care about is that I can safely make a transaction to get something I want in exchange for something that I have. The safety protections involve the ability to identify accounts with real people within the reach of the law, the ability to reverse transactions made fraudulently, etc. If I have US dollars and want something that isn’t US dollars, then I have a ton of safe options to do that (with different protection depending on what I choose). If I instead have some kind of crypto asset and want something that’s not a crypto asset, the fraud protection is much weaker.

Yeah, crypto is kinda bare-metal. Isn’t that a major problem with it?

> And no, a wire transfer or intra-bank transfer is typically not reversed.

Yes, it sounds like we agree on this point. This is part of why most people don’t use wire transfers.

There are, however, conditions where wire transfers can be reversed. Banks are also somewhat proactive about protecting you from making wire transfers. It’s not a service that they offer lightly.

Re: Solend seized $170M of user funds

#216

Post by jimmydorry »

klodolph wrote: post #215
jimmydorry wrote: post #213

Earlier quoted context omitted.

And most people do not use crypto? I don't see how the comparison to payment processing companies built on-top of the financial infrastructure is relevant, when bare-metal level of crypto acts most like wiring / transfering money between banks. And no, a wire transfer or intra-bank transfer is typically not reversed. Even for big-names, like Linus, it is not so simple and requires personal connections with industry i…

I don’t see how “most people don’t use crypto” is at all germane to the discussion. Of course most people don’t use crypto—it’s kinda new. No other explanation is needed. At the end of the day, what I care about is that I can safely make a transaction to get something I want in exchange for something that I have. The safety protections involve the ability to identify accounts with real people within the reach of the…

>I don’t see how “most people don’t use crypto” is at all germane to the discussion.

Crypto's closest anologue is wire transfers... which you excluded with the reason of "most people don't use them".

>At the end of the day, what I care about is that I can safely make a transaction to get something I want in exchange for something that I have. The safety protections involve the ability to identify accounts with real people within the reach of the law, the ability to reverse transactions made fraudulently, etc. If I have US dollars and want something that isn’t US dollars, then I have a ton of safe options to do that (with different protection depending on what I choose). If I instead have some kind of crypto asset and want something that’s not a crypto asset, the fraud protection is much weaker.

Again, try applying any of this to wire transfers. Almost all of these concerns apply to both crypto and wire transfers.

>Yeah, crypto is kinda bare-metal. Isn’t that a major problem with it?

What's the issue with having access to a permisionless, bare-metal system?

>There are, however, conditions where wire transfers can be reversed. Banks are also somewhat proactive about protecting you from making wire transfers. It’s not a service that they offer lightly.

That is not reversing, that's simply preventing you from initiating the transfer.

Re: Solend seized $170M of user funds

#217

Post by klodolph »

jimmydorry wrote: post #216
klodolph wrote: post #215

Earlier quoted context omitted.

I don’t see how “most people don’t use crypto” is at all germane to the discussion. Of course most people don’t use crypto—it’s kinda new. No other explanation is needed. At the end of the day, what I care about is that I can safely make a transaction to get something I want in exchange for something that I have. The safety protections involve the ability to identify accounts with real people within the reach of the…

>I don’t see how “most people don’t use crypto” is at all germane to the discussion. Crypto's closest anologue is wire transfers... which you excluded with the reason of "most people don't use them". >At the end of the day, what I care about is that I can safely make a transaction to get something I want in exchange for something that I have. The safety protections involve the ability to identify accounts with real p…

I don't understand what kind of argument you are trying to make here. It seems like you are interested in comparing wire transfers to cryptocurrency, but I don't understand what comparison you're trying to make or what the purpose of the comparison is. Either I just don't understand what you're saying, or maybe your argument doesn't make any sense, or maybe you're just really bad at explaining things.

I had thought that this was a comparison of modern non-crypto banking / finance systems to the infrastructure provided by crypto, but you have made it very clear that you consider a more general comparison "out of scope" for whatever point you are trying to make.

Re: Solend seized $170M of user funds

#218

Post by Zaskoda »

zomglings wrote: post #184
Zaskoda wrote: post #20

I've been working on a game for Ethereum for a while. In recent times, "I" has become "we" and we're getting a fair bit more serious about it. In the last year, we watched a bunch of local startups with relatively weak game concepts get heavily funded to build with Solana. It made me sad and, admittedly, a bit jealous at the time. In retrospect, I couldn't be more happy that we're still building for the Ethereum virt…

What’s the game? My team has been playing a lot of conquest.eth recently and we’re ramping up on darkforest, too, now. Would love to check it out of there’s anything available for us to try.

It's Orbiter 8, but we're not on any main nets yet. Still just on test nets. We did release a new demo of our work in Febuarary so if you just want to get the gist of it, it's on our website Orbiter8.com and easy to access with MetaMask. I had not heard of conquest.eth until just now, but darkforest is super clever. It also happens to share a few high level esthetics with O8, given that both are space games. However, the mechanics of each are totally unrelated. DF is a neat example of things that can be done entirely on-chain. Good stuff!

Re: Solend seized $170M of user funds

#219

Post by EGreg »

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.

Is the OA of Hex a centralized entity?

Re: Solend seized $170M of user funds

#220

Post by jquery »

ETH_start wrote: post #203
jquery wrote: post #168

Earlier quoted context omitted.

If our government can catch money launderers because they’re running empty washing machines or selling unused tickets to shows, it’s hard to think of anything useful crypto can do that couldn’t be meaningfully regulated away.

The government takes billions of dollars from people every year without due process, using civil forfeiture laws: https://ij.org/press-release/new-report-finds-civil-forfeitu... But there's no evidence it stops much real money laundering: https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1... If money laundering were effectively dealt with, that would stop almost all theft and organized crime, as laundering…

I’m against civil forfeiture laws, I don’t think they are important in the fight against money laundering.

Anyway I’m not saying money laundering doesn’t happen, it does… and that’s probably the best case use case for crypto and one of the pillars of its value-add. People who don’t care about legality won’t care if crypto is regulated away either. I’m just demonstrating it’s not free to get away with these crimes. Plenty of people get nailed for money laundering every year.

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