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OpenSea product chief accused of flipping NFTs with insider information

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Re: OpenSea product chief accused of flipping NFTs with insider information

#31

Post by thebean11 »

qeternity wrote: post #26
thebean11 wrote: post #23

Earlier quoted context omitted.

Could you be more specific about what makes crypto less fair than the other markets hedge funds trade in?

Read my original comment. For all of the Occupy Wall Street rhetoric, overwhelming majority of people in finance are law abiding participants. That’s not to say that they’re particularly moral or honest people. But in regulated markets, regulators seek to make rule breaking a negative EV outcome, so rule following becomes the logical behavior for a self interested actor. Regulators might not always succeed, but it st…

Let’s say hypothetically all financial regulation is lifted tomorrow, I have a hard time believing the current “honest” participants won’t have a similar free for all.

We may be saying the same thing: the difference is the regulation, not the moral character of participants.

Re: OpenSea product chief accused of flipping NFTs with insider information

#32

Post by felixbraun »

qeternity wrote: post #9

The entire crypto world is like this. MtGox pumping and wash trading with Willy bot. Bitmex trading against and liquidating customers. Coinbase hiring Litecoin creator Charlie Lee and having him frequently wash trading 99% of LTC volume. Each of these has been _the_ preeminent exchange at some point in time, just as OpenSea is for NFT. FTX was born from one of if not the largest crypto trader/market maker, and one of…

IMO people overestimate how much alpha is in knowing your customers’ positions (as exchange owner).

Open interest, volume and price data down to seconds is available via APIs in real-time, from which it is absolutely possible to build a model of positioning.

If you launch a new exchange, your biggest problem is lack of liquidity, meaning limit orders won’t fill ‘timely’ and market orders slip, which is very bad UX obviously.

That is why it is fairly obvious that one of the best market makers in the industry launched their own exchange; Alameda could provide excellent liquidity for FTX from day one.

Re: OpenSea product chief accused of flipping NFTs with insider information

#33

Post by SkyMarshal »

ryanSrich wrote: post #8
brightball wrote: post #7

Just validates that the entire NFT concept is as ridiculous as it sounds.

How does potential insider trading in any way validate NFTs being ridiculous?

Most NFTs are technologically uninteresting for one reason or another.

Either the actual art exists off-chain somewhere and there’s just a hash of it onchain, which the “owner” controls with the private key of the transaction or contract the hash is in. But the art can still be copy-pasted all over the Internet and the only way to prevent rando’s from using it for free is with traditional copyright law, so it’s not actually decentralized.

Or the art itself is onchain but it’s just some avatar manually drawn in Microsoft Paint (cryptopunks I’m looking at you) and not pseudo-randomly procedurally generated in the smart contract or anything technologically novel and notable like that.

The concept of NFTs is interesting and may lead to something truly cool someday, but most of the implementations right now are trash.

Disclaimer - I haven't reviewed all the NFT implementations, there are too many. But if there are any that are fully on-chain, decentralized, have zero off-chain dependencies, and are artistically and/or technologically novel, then please let me know!

Re: OpenSea product chief accused of flipping NFTs with insider information

#34

Post by geofft »

thebean11 wrote: post #31
qeternity wrote: post #26

Earlier quoted context omitted.

Read my original comment. For all of the Occupy Wall Street rhetoric, overwhelming majority of people in finance are law abiding participants. That’s not to say that they’re particularly moral or honest people. But in regulated markets, regulators seek to make rule breaking a negative EV outcome, so rule following becomes the logical behavior for a self interested actor. Regulators might not always succeed, but it st…

Let’s say hypothetically all financial regulation is lifted tomorrow, I have a hard time believing the current “honest” participants won’t have a similar free for all. We may be saying the same thing: the difference is the regulation, not the moral character of participants.

But the entire value proposition of cryptocurrency is how difficult it is to regulate via traditional law enforcement mechanisms.

Which can be used for good, of course - the standard example being things like "transferring money across immoral embargoes". But in this case, if the difference is regulation, then the question for ordinary folks who are not themselves trying to pull a scam is - would you rather work with dishonest con men who believe they will get in trouble with law enforcement if they actually con you, or with dishonest con men who believe they can get away with it?

Re: OpenSea product chief accused of flipping NFTs with insider information

#35

Post by thebean11 »

geofft wrote: post #34
thebean11 wrote: post #31

Earlier quoted context omitted.

Let’s say hypothetically all financial regulation is lifted tomorrow, I have a hard time believing the current “honest” participants won’t have a similar free for all. We may be saying the same thing: the difference is the regulation, not the moral character of participants.

But the entire value proposition of cryptocurrency is how difficult it is to regulate via traditional law enforcement mechanisms. Which can be used for good, of course - the standard example being things like "transferring money across immoral embargoes". But in this case, if the difference is regulation, then the question for ordinary folks who are not themselves trying to pull a scam is - would you rather work with…

I think the underlying value prop is totally orthogonal to this thread. The fundamental value prop is that software can trustlessly, directly, and irreversibly make financial transactions, which certainly does enable regulatory arbitrage. I understand why other applications haven’t convinced most people, but that’s a different discussion.

Re: OpenSea product chief accused of flipping NFTs with insider information

#36

Post by notJim »

dreyfan wrote: post #10
ryanSrich wrote: post #8

Earlier quoted context omitted.

How does potential insider trading in any way validate NFTs being ridiculous?

Because it's all a sham and the monetary success of a particular drop is contingent upon how well it's advertised. By knowing when and what drops would be featured, that was the information asymmetry he was exploiting. There is nothing fundamentally useful about a single NFT so far. It's all speculative bullshit in every sense of the imagination. This is just the ICO scams of 2019 regurgitated [1]. [1] https://en.wik…

> There is nothing fundamentally useful about a single NFT so far.

Do people promise there is? NFTs essentially seem like digital collectible cards. It seems stupid to me, but so does collecting little pieces of cardboard with pictures printed on them.

Re: OpenSea product chief accused of flipping NFTs with insider information

#37

Post by zachmx »

space_rock wrote: post #27
mekkkkkk wrote: post #12

Anyone surprised by this must be living under a rock. NFTs and crypto in general has turned into mostly an unregulated playground for market manipulation. It's sad to see these fantastic technologies falling into darkness. Same can be said about the majority of the internet and its phenomenon to be honest.

I was agreeing with you until you said fantastic technology. Crypto has always involved outrageous fraudulent claims about the technology in its sales pitches. The technology they sell does not exist. Decentralised trading is still incomplete research. It's vaporware

Just curious, why do you say decentralized trading is incomplete research/vaporware? There are dozens of decentralized exchanges that are up and operating, including sites like Dydx and uniswap. Obviously these are still experimental, but they do work.

Re: OpenSea product chief accused of flipping NFTs with insider information

#38

Post by yokem55 »

space_rock wrote: post #27
mekkkkkk wrote: post #12

Anyone surprised by this must be living under a rock. NFTs and crypto in general has turned into mostly an unregulated playground for market manipulation. It's sad to see these fantastic technologies falling into darkness. Same can be said about the majority of the internet and its phenomenon to be honest.

I was agreeing with you until you said fantastic technology. Crypto has always involved outrageous fraudulent claims about the technology in its sales pitches. The technology they sell does not exist. Decentralised trading is still incomplete research. It's vaporware

Care to explain why you think uniswap isn't decentralized trading? The contracts are immutable, 100% on chain, and can be interacted with without any help from the uniswap web site.

Re: OpenSea product chief accused of flipping NFTs with insider information

#39

Post by Alex3917 »

qeternity wrote: post #9

The entire crypto world is like this. MtGox pumping and wash trading with Willy bot. Bitmex trading against and liquidating customers. Coinbase hiring Litecoin creator Charlie Lee and having him frequently wash trading 99% of LTC volume. Each of these has been _the_ preeminent exchange at some point in time, just as OpenSea is for NFT. FTX was born from one of if not the largest crypto trader/market maker, and one of…

> The entire crypto world is like this.

I've heard that there are a bunch of companies in the space paying their blockchain engineers minimum wage (when their salaries should have been at least 250k), and instead compensating them by letting them insider trade on their press releases. The reason the people in these cases rarely get fired when found out is that it's literally their compensation package.

Re: OpenSea product chief accused of flipping NFTs with insider information

#40

Post by ketzo »

thebean11 wrote: post #35
geofft wrote: post #34

Earlier quoted context omitted.

But the entire value proposition of cryptocurrency is how difficult it is to regulate via traditional law enforcement mechanisms. Which can be used for good, of course - the standard example being things like "transferring money across immoral embargoes". But in this case, if the difference is regulation, then the question for ordinary folks who are not themselves trying to pull a scam is - would you rather work with…

I think the underlying value prop is totally orthogonal to this thread. The fundamental value prop is that software can trustlessly, directly, and irreversibly make financial transactions, which certainly does enable regulatory arbitrage. I understand why other applications haven’t convinced most people, but that’s a different discussion.

“regulatory arbitrage” is a pretty hilarious way to spell “extremely profitable crime”
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