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The collapse of the IRON stable coin

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Re: The collapse of the IRON stable coin

#281

Post by brigade »

meowface wrote: post #18
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 can't imagine it'd be possible. There're a whole lot of Andy Kaufman-esque / kayfabe / "the most entertaining outcome is the most likely" things going on. Literally no conceivable parody could work as an actual parody, I think. There are coins people are getting rich off of with names and logos like "Pregnant Butt", "CumRocket", racial slurs, etc. There's absolutely no doubt in my mind that if it hasn't already hap…

Scamcoin hit a $70 million market cap within an hour, and PonziCoin absolutely would have hit a multi-million dollar market cap if the dev hadn't pulled the plug.

Re: The collapse of the IRON stable coin

#282

Post by hluska »

redisman wrote: post #238
juliansimioni wrote: post #170

Earlier quoted context omitted.

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.

These are not Ponzi schemes. In a ponzi you have a mechanism to distribute money to early adopters in the tree. These are just pump and dumps but you create and pre-mine the asset before pumping it. There were ponzis some years back like OneCoin and BitConnect.

So basically a Ponzi scheme where only the earliest adopters get paid and everyone is remarkably open about that?? :)

Re: The collapse of the IRON stable coin

#283

Post by kemonocode »

ayngg wrote: post #278
kemonocode wrote: post #269

I knew crypto detractors were going to have a field day with this one. ;) With DeFi, you're simply exchanging one type of risk for another. Without due diligence you're pissing your money away- as it is to be expected. And as it was brought up before, this was an unaudited contract that had been running for what, weeks? Months? Personally, I cannot say I understand DeFi deeply enough to get into the intricacies of "y…

The big thing that people get caught up on is the fact that the space is essentially permissionless and because of that there is no regulation meaning everyone is entirely responsible for themselves, a level of responsibility that is foreign to most people. Anyone can make anything they want, which will inevitably lead to projects that outright scams, or fail because of bugs or misaligned incentive structures. Of cou…

If I understand things correctly, it didn't start out with such insane yields- that merely happened once it lost its peg. Even with my skepticism when it comes to stablecoins in general, I'd first put money in something that's overcollaterized so it has greater chances to survive "black swan" events (Such as DAI) or that has been properly audited so there's a guarantee $1=1 token (None yet- USDC is far less dodgy than USDT, but it too has only been merely audited, not attested.)

Re: The collapse of the IRON stable coin

#284

Post by msgilligan »

femto113 wrote: post #268
msgilligan wrote: post #259

Earlier quoted context omitted.

Smart contracts is a horrible name. The better analogy (which has been around for years) is that they are the digital equivalent of (snack and beverage) vending machines. As with vending machines, they have their use cases, but they aren't lawyer "smart" and they certainly aren't legal contracts. I'm not sure how much trouble a better name would have saved everyone, but it might have done a better job of setting expe…

So is this event the digital equivalent of the bag of chips getting stuck on the row below it or the frustrated customer shaking the machine until it falls over and squashes them?

Looks like some very expensive chips got stuck in the machine.

Re: The collapse of the IRON stable coin

#285

Post by meowface »

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.

>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.

I think this isn't quite right in all cases. I think some people know it's a Ponzi scheme and genuinely do want a Ponzi scheme. They just want to get in and out quickly. It's gambling. Sometimes you're a victim and you lose money, and sometimes it works out and you make money.

Re: The collapse of the IRON stable coin

#286

Post by wallacoloo »

freewilly1040 wrote: post #266

> 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 What's the best DeFi project? One where the value proposition is actually clear, there are actually people using it and it's actually at parity or better than a traditional financial system offering?

Uniswap, the decentralized exchange. Is it decentralized finance?… up for debate (but at the very least, it’s a critical component of the DeFi ecosystem). But I can plop $x of Ethereum and $y of tokenized BTC onto it, providing a valuable service to anyone who wants to exchange the two for any reason (e.g. tuning their price exposure to those assets), forget about it for a couple months, and come back to see that it’s earned me a few % in fees. In many cases it’s easier to use than the traditional equivalents because there’s no registration system and it’s instant. It falls short in some comparisons because of Ethereum transaction fees, but there’s a lot of work happening to address that.

Runner ups are Compound and Aave — two large overcollateralized lending platforms. And the Maker: the USD-pegged “stablecoin” which gives anyone who doesn’t want ETH price exposure access to these DeFi tools. That’s the area where a lot of people think there’s room for improvement, hence all the experiments like the project this article is about.

Re: The collapse of the IRON stable coin

#287

Post by Dylan16807 »

ipsin wrote: post #72

I found this article interesting, but the HN title ("Off-by-one error...") doesn't match the article's, or its conclusion? The article mentions a boundary condition ("_share_price > 0"), not an off-by-one error.

"An off-by-one error or off-by-one bug (known by acronyms OBOE, OBO, OB1 and OBOB) is a logic error involving the discrete equivalent of a boundary condition."

And these are discrete numbers, so I don't see the problem.

A huge fraction of off by one errors are > vs >= or < vs <= in a for loop.

Re: The collapse of the IRON stable coin

#288

Post by hluska »

RaketenStadt wrote: post #232
raziel2701 wrote: post #220

Earlier quoted context omitted.

So what you're describing is that this is a next-generation Ponzi scheme where nobody goes to jail but a bunch of people still lose money. But yeah let's keep arguing over semantic definitions.

No, this isn't a Ponzi scheme. That's the only thing I've said. I think you believe "Ponzi scheme" and "scheme" are interchangeable. Usually the go-to lazy catchphrase is "we're just arguing semantics!" but "semantic definitions" is new.

To be charitable, I think it’s more likely that this is an entire area where regulation hasn’t caught up so we don’t have any common names available.

These coins are ponzi-like in that only the earliest of adopters have any chance and only if they know enough to get currency out without hitting an inflection point that brings down the whole thing. But that’s where the similarity ends - the mechanism is different, they don’t operate like a Bernie Madoff and they’re honest about the whole process.

This is something else and while it’s Ponzi-like, it’s a different beast. I don’t think there’s anything particularly wrong with expanding the definition of Ponzi scheme for now, just so we have something to educate some irrationally exuberant retail investors…

Re: The collapse of the IRON stable coin

#289

Post by meowface »

brigade wrote: post #281
meowface wrote: post #18

Earlier quoted context omitted.

I can't imagine it'd be possible. There're a whole lot of Andy Kaufman-esque / kayfabe / "the most entertaining outcome is the most likely" things going on. Literally no conceivable parody could work as an actual parody, I think. There are coins people are getting rich off of with names and logos like "Pregnant Butt", "CumRocket", racial slurs, etc. There's absolutely no doubt in my mind that if it hasn't already hap…

Scamcoin hit a $70 million market cap within an hour, and PonziCoin absolutely would have hit a multi-million dollar market cap if the dev hadn't pulled the plug.

>Scamcoin hit a $70 million market cap within an hour, and PonziCoin absolutely would have hit a multi-million dollar market cap if the dev hadn't pulled the plug.

Fantastic. I genuinely was just coming up with those on the fly and did no research to see if any existed, but added "if it hasn't already happened" because I was still confident enough that some very likely did exist and very likely were successful.

My post with your reply feels a little like movie scene dialogue. (Perhaps Aaron Sorkin.) What a time to be alive.

Re: The collapse of the IRON stable coin

#290

Post by meowface »

aidenn0 wrote: post #251
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?

That reminds me of a discussion a while back on whether or not "Snow Crash" was a parody. The main character was named "Hiro Protaganist" who worked delivering pizza for the mafia and there was a character who could take on pretty much any number of people completely unarmed, plus had a nuclear bomb wired to a dead-man's switch which caused quasi-governmental organizations to leave him alone. That's two items, but th…

I think it's one of those things that's more complex than being one or the other. It's simultaneously a parody and also a somewhat earnest prediction of a not-super-far-fetched potential future world.
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