More of these domino effect collapses are coming. It's a good time to remind people to bring their coins home if they're in custody anywhere.
YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
311–320 of 411 posts
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#312Earlier quoted context omitted.
We considered putting some of our treasury in Anchor. I didn't build a model, just one hour of DD was enough to see the risks. Here is the message I shared with my team on Slack with the findings from a very brief DD: https://twitter.com/josusanmartin/status/1524323026942242818
About 5 seconds thought would be enough to see the risks, and the same goes for the rest of the crypto ecosystem. Even the name of UST is clearly meant to con people who confuse it with USDT. It's scams upon scams all the way down. Even if your figures seem out of date, your argument against UST also holds for USDT (which underpins much of the crypto price bubble): There is 7B USD in circulation and the market cap of…
You say this, possibly as someone who knows a lot about this stuff but there are plenty of people (including engineers) who don't know enough to refute the bold claims made by the crypto-evangelists and who be convinced that "obviously X is bad, but our product is completely different".
I personally have lots of misgivings about various crypto but I really don't have enough expertise to argue against someone telling me that I just don't understand and everything is fine.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#313Earlier quoted context omitted.
Money is a use case that attracts scams indeed, and will be harder to get right. But we're building for a future where apps like Calendly can be smart contracts. With new blockchains* that have a very low tx fee (imagine $0.00001 / tx), I clearly see many services migrate to smart contracts. They won't require any subscription, existing data is never at risk of being wiped out, and hopefully we will keep optimizing a…
Excuse my language, but why the fuck would I want my calendar on the blockchain, and also pay for the privilege?
Next blockchain killer app: To-do lists.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#314Earlier quoted context omitted.
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 ab…
I'd swap 1) and 2). The people writing the mortgages were telling the borrowers to lie, and that the lies wouldn't be checked. It wasn't some oversight.
I think it was mainly independent mortgage brokers who were telling borrowers to lie, not the actual banks who were providing them
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#315Earlier 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.
That raises an interesting ethical problem, really; should there be a duty to report this sort of thing, or is "scheme X is fundamentally flawed/a scam and investors will lose everything" legitimate proprietary information? As I understand it, various analysts were pretty sure at the time that Madoff's scheme was a Ponzi, but in general they didn't tell anyone (in fairness, one attempted to and had trouble getting li…
If they are unregulated then it isn't a crime until it is a crime, and in this case, by then far too late to sort out.
Even when it does go wrong, there still might not be a crime any more serious than being an idiot, obviously would be different if the company misrepresents itself for gain, which would be fraud.
I suspect that many of these people genuinely believe their own hype, which is how they convince others to buy into it.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#316Earlier quoted context omitted.
> That being said, calling these platforms "ponzis" isn't correct I feel like "ponzi" has become the "magazine/clip" derailer of crypto discussions.
A ponzi is when an investment that supposedly produces a return actually pays the funds needed to deliver that return from new entrants to the scheme rather than productive enterprise. Given that there’s literally no productive return-producing enterprise underpinning any of this it’s totally fine to consider the word ponzi at least loosely applicable to the entire concept of cryptocurrency as practiced.
By this definition most crypto wouldn‘t be a ponzi.
E.g. bitcoin doesn‘t claim that funds are invested in productive entreprise.
It is clear that it is only a value store (like gold). Whether it is any good at storing value long term, we will see.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#317Earlier quoted context omitted.
Products that are trying to be useful first do their due diligence and realize that blockchain is wholly unsuitable for anything other than creating speculative assets and just use a normal database instead.
Well, they also have to pick a payment processor. And find somewhere to host it all. And pay for all of the above.
Crypto doesn't solve this, you still need to pick a currency/exchange and pay them transaction fees. That on top of the potential delay issues/fraud is much harder to deal with in the crypto-sphere etc.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#318This made me think... back in 2012, a startup called Kueski (now a very successful BNPL in Mexico) applied for YC (twice in 2 years). The founders were rejected, even though the business model was sound and the economics were pretty well laid out (I know the CEO and ge is a really meticulous person). The reason YC gave for the rejection was that Mexico was an unknown market, and they felt lending in there was too ris…
> The reason YC gave for the rejection was that Mexico was an unknown market, and they felt lending in there was too risky for them.
That's a fair and reasonable reason.
Countries have their own specificities and, very importantly, their own laws an regulations. If you're not familiar the wise move is to stay out.
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#319Earlier quoted context omitted.
Dumb question but what's the user experience difference between a browser wallet and saving a credit card in a password manager?
Crypto wallets double as a kid of single sign-on identity. If you have a crypto wallet in a browser add-on, you already have a paudonymous account usable on tens of thousands of crypto enabled web apps. All you have to do is one-click sign-in. No sign-up flow, no emails, no commitment. You just tap login and you have an account. One more tap and you've paid. Plus other benefits like effectively free micro-transaction…
What happens when someone steals your key?
Re: YC W22 Stablegains is being sued for losing $42M in funds from 4878 customers
#320Earlier quoted context omitted.
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 viewe…
Thank goodness the SEC is protecting people and their money… by sitting on their hands and doing jack shit.
> the SEC is protecting people and their money… by sitting on their hands and doing jack shit
It’s unclear if they have jurisdiction. The likes of Coinbase’s Armstrong have certainly been lobbying hard to constrain it. In any case, it’s hard to be sympathetic when escaping regulation is the rallying cry of so many crypto enthusiasts.