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The math prodigy whose hack upended DeFi won’t return funds

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Re: The math prodigy whose hack upended DeFi won’t return funds

#381

Post by rootusrootus »

thethimble wrote: post #351
dropnerd wrote: post #317

Earlier quoted context omitted.

i understand why we might want to dissuade speculative investments, byt why is it the state's role to prevent citizens from speculating?

It’s not a perfect analogy but it’s the same reason we have laws that require seatbelts. In theory this impinges on the liberty of adults, but in practice the it obviously saves lives. When people commit harm to themselves out of ignorance, I think it’s reasonable for a government to step in. Note that I think it’s reasonable to fundamentally disagree from a libertarian standpoint but I don’t see many reasonable peop…

> It’s not a perfect analogy but it’s the same reason we have laws that require seatbelts. In theory this impinges on the liberty of adults, but in practice the it obviously saves lives.

At the risk of going off-topic, I think that seatbelts isn't a good analogy because I don't think we require seat belts to protect people from themselves. It is to protect other people. When you are unbelted, it is far more difficult to maintain control of your vehicle when things start to get even a little bit exciting. You can't worry much about car control when you're getting tossed out of your seat.

I would say helmet laws are a closer analogy, because AFAICT that is almost entirely about protecting people from themselves.

Re: The math prodigy whose hack upended DeFi won’t return funds

#382

Post by rootusrootus »

why_only_15 wrote: post #278
rootusrootus wrote: post #264

Earlier quoted context omitted.

> If a consenting adult wants to deposit their money into a system that they have full visibility into, why should we stop them? We already do exactly that, e.g. Accredited Investor.

Yes but should we do it? Those rules prevent most people from e.g. investing into startups.

Personally, I think we should allow individuals to take a short, inexpensive (free would be nice) class that would grant them Accredited Investor status.

Re: The math prodigy whose hack upended DeFi won’t return funds

#383

Post by glerk »

QuantumGood wrote: post #327
glerk wrote: post #232

Earlier quoted context omitted.

> If did have an owner, that person is probably violating all sorts of securities laws in countless jurisdictions. That's probably what upsets me most about this story. These developers want to have it both ways: it is decentralized finance and nobody owns the contract as long as we are making money, but we want all the laws and regulations of traditional finance to protect us if things don't go our way. I am saying…

The "laws and regulations of traditional finance" also protect them if things "go their way". They're not trying to "have it both ways", the law protects everyone in all scenarios.

In practice, the law would protect them if they were the owners of the exchange. But here the "exchange" is just a public piece of code that all participants agree to interact with. I can't even begin to imagine the legal hoops they would have to go through to run a centralized regulated exchange.

Re: The math prodigy whose hack upended DeFi won’t return funds

#384

Post by postalrat »

grumple wrote: post #376
t0mas88 wrote: post #368

Earlier quoted context omitted.

No, but that's not the same. Signatures and checks are covered by terms & conditions (and law) that you must follow. A better anology is if you figure out a mathematical advantage within the rules of a casino game, are you allowed to win? I believe you are, as long as it's within the rules of the game. And the casinos are smart enough to create rules against any lasting mathematical advantage.

I know how to pick locks. The locks are designed to open when pins are raised by a certain amount. Doesn't mean I have a right to anything I can unlock. The intention of the system is to work to as security. Just because you find a way around the security doesn't mean that you are now immune to the law regarding ownership. When SHAX gets cracked, that doesn't give the person figuring it out a right to transfer all th…

If private keys are proof of ownership then what's the difference between keys generated before vs keys generated after. If both keys are valid then both have then both are proof.

Re: The math prodigy whose hack upended DeFi won’t return funds

#385

Post by knorker »

setr wrote: post #354
knorker wrote: post #121

Earlier quoted context omitted.

The article even hints at this: > [a crypto bro] criticized the team for turning to a centralized institution like the courts for help But that's exactly the flaw of smart contracts, and why its promises will never work. The hard part of contracts was never execution. The hard part was always conflict resolution and abidance by fair rules (i.e. "laws"). The hard part is what creates the overhead. Smart contracts neve…

Eventually there will be smart contracts with assigned arbitrators capable of undoing dependent smart contract transactions, with the right to execute granted by a separate smart contract, which is controlled by a vote to be taken by a randomly selected set of peers in the community, who must first watch in total a video of the aggrieved and offending parties position their argument. And arbitration contracts that ca…

Maybe. But you still need an override from real courts, when the contracts fail.

That's what courts are for. When someone finds an exploit in the smart contract there must be a "no that's clearly not what anyone meant. Nobody actually wanted all the money in the world to go to Hacker McHackerface".

If your assumption is that one of these contract layers is "perfect", then it's not realistic.

Re: The math prodigy whose hack upended DeFi won’t return funds

#386

Post by chii »

nybble41 wrote: post #378
vageli wrote: post #374

Earlier quoted context omitted.

If a site has prices stored on the frontend and a user edits the price to make it lower, do you think the user has a legal basis to receive the item at their new specified price? I don't think many jurisdictions would say they do. Further, in many places your example itself falls apart. https://smallbusiness.chron.com/company-advertising-price-wr... https://www.findlaw.com/smallbusiness/business-contracts-for...

> If a site has prices stored on the frontend and a user edits the price to make it lower, do you think the user has a legal basis to receive the item at their new specified price? There was a case like that in the early days of online shopping, which was actually decided in favor of the customer. The prices of items in the shopping cart were stored in form fields, and the customer edited them before placing the orde…

i would imagine that directly editing the price on the label is over the line, and the analogy breaks down when compared to smart contracts with bugs.

Re: The math prodigy whose hack upended DeFi won’t return funds

#387

Post by hnfong »

sushid wrote: post #310
Veserv wrote: post #239

Earlier quoted context omitted.

The difference is that the ATM provider did not explicitly promise that the “code is law” which directly implies that they want to and aggressively argue that they are waiving their legal recourse as long as they were valid user inputs. In contrast, basically nobody outside of the blockchain space would waive their legal recourse in such a manner and thus would have legal recourse if the intent of their system was by…

Where and when did the defi protocol in question explicitly state "code is law"? No one is waiving legal recourse when they're using Web3. I'm not a lawyer but I'd be very surprised if one could even "waive legal recourse" just because it's blockchain all the way down vs mySQL. I believe you're making this claim because _some_ crypto proponents believe "code is law" and because your personal logical framing is that w…

> No one is waiving legal recourse when they're using Web3.

I've seen quite a few people do this. May not everyone, but a lot. The "commentary added by a random law firm" is the general sentiment I understood when people were hyped up on smart contracts. There's an industry of smart contract programmers who write code under the assumption that there may be no recourse (to the legal system) if they introduced bugs.

If your attitude represents the sentiment of "web3" these days, it is really a very hilarious backtrack on the previous (hyperbole) claims...

Re: The math prodigy whose hack upended DeFi won’t return funds

#388

Post by hnfong »

sushid wrote: post #116
bombcar wrote: post #76

Earlier quoted context omitted.

Many people in crypto want to not have to comply with "real world" laws right up until the point where it would be to their benefit to do so. And if "smart contracts" depend on real law, then they're not really needed in many of the supposed use cases.

Just because there are crypto anarchists doesn't mean that all crypto proponents are anarchists. And smart contracts (not sure why they're in quotes in your comment) can depend on real law and still operate fine (e.g. I'm sure NBA Topshot would file a legal case again Dapper Labs if they did something significantly damaging to their brand/NFTs, etc.).

> Just because there are crypto anarchists doesn't mean that all crypto proponents are anarchists.

That's obvious correct but what's the point? The whole discussion here is that there exists these "crypto anarchists" and their ideal world seems ridiculous to at least a couple people here...

Re: The math prodigy whose hack upended DeFi won’t return funds

#389

Post by hnfong »

daveed wrote: post #106
Ajedi32 wrote: post #90

Earlier quoted context omitted.

That's not how the law works though, at least not in any country I know of. If you exploit flaws in computer code to steal something of real-world value, that's a crime. We're all bound to the laws of physics, just as in the world of smart contracts all are bound to the laws of code. But none of that changes the existence of the laws of men.

(Replying to this one, but the sibling comment feels similar in vein). - I'm not really saying the crypto-side argument is right, really just trying to clarify my perception of what they're saying re: the comment above me. - The physics thing is really just a comment re: when it's hypocrisy and when it's not. - FWIW, theft in crypto isn't super well-defined to me re: the laws of men either. Maybe someone who knows cu…

Under common law jurisdictions (and as I understand it in the US too), "intent" of the accused is an important element of the crime. The definition is broad enough to cover crypto theft, but it might require the court to interpret whether the alleged actions were done with "dishonest intent" etc.. which can be a rather subjective thing.

Higher courts, due to their inherent ability to set precedents, usually also consider broader policy concerns eg. whether the decision makes sense from enforcement perspective, how the ecosystem might be affected etc..

Re: The math prodigy whose hack upended DeFi won’t return funds

#390

Post by hnfong »

cogman10 wrote: post #218
er4hn wrote: post #198

Earlier quoted context omitted.

Let's say that I place a vending machine in a public space, such as a street or a park. The public is able to interact with it by inserting FIAT coins to purchase DRNK. Someone clever figures out a way to interact with the vending machine to extract DRNK at less than it's intended FIAT price. Two questions at this point: (a) Is this a theft from the person who placed the vending machine? Why or why not? (b) How is th…

That sort of depends on what the exploit is, right? For example, if DRNK costs $1 per unit, but I find out that by putting in $1.25 I get 2 units, have I actually exploited the machine? Is it not reasonable to assume that discount was intended? Now, of course, if I'm prying open the machine with a prybar then we could argue that's just theft. But, putting money in the machine and getting units out is the intended int…

> A smart contract defines all the interactions that are valid.

A smart contract defines all the interactions. Whether they are legally valid is another matter. In contract law, usually the intentions of the parties (at the moment of agreeing to the contract) are taken into consideration. In most other cases, the legal system has rules to determine the validity. The customary practices of the crypto ecosystem is something they might take into account, but it's not necessarily a final outcome.

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