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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

#391

Post by hnfong »

retrac wrote: post #245
moneywoes wrote: post #194

Earlier quoted context omitted.

Can’t he be extradited

Maybe. That actually raises some interesting questions, come to think. A key factor in an offence is the location of the offence, which usually determines jurisdiction and the relevant laws. In the classic example of hacking an American bank from Canada, the offence occurs on the American bank's servers in the United States. That's relatively clean and simple, legally. With an Ethereum smart contract ... I'm not even…

The USA is pretty good at extraditing people who committed crimes outside its borders when it serves their national interests.

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

#392

Post by setr »

knorker wrote: post #385
setr wrote: post #354

Earlier quoted context omitted.

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.

Thats why you have the arbitration contract… to allow an arbiter to undo the work, with the reasoning “this isn’t what was intended”

But anyways that was in jest; the crypto community will eventually recreate the same systems and bureaucracies already in play today as they run into all the edge cases that occur with traditional currency (fundamentally: currency carries provenance and is only fungible until its not, and the transfer of funds between two parties does not actually involve only the two parties — and lawyers write excessively defensive, excessively long contracts for a reason).

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

#393

Post by billpg »

postalrat wrote: post #97
billpg wrote: post #83

Earlier quoted context omitted.

If you discovered a significant shortcut to hashing and then went back to block 1 and re-mined every block until your branch was the one with the most proof-of-work, I'd have a hard time trying to claim that your branch wasn't the legitimate one, according to Bitcoin's own rules. I suspect in this hypothetical scenario, however, the bitcoin developers would write a new rule.

Perhaps a way to generate working private keys for any address. So I could move coins as I wish.

"Not your keys, not your coins."

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

#394

Post by criddell »

Dylan16807 wrote: post #380
criddell wrote: post #370

Earlier quoted context omitted.

Ownership is a legal concept and the blockchain says nothing about that. It merely records transactions and says nothing about the right to do those things. For example, if the court orders you to turn over your Bitcoin holdings to creditors in a bankruptcy proceeding and instead you transfer them elsewhere, you are probably going to jail. When you transferred them, the coins were in your possession, but you weren't…

Correct, blockchain itself doesn't mess with ownership. But NFTs and certain smart contracts are meticulously designing a custom form of ownership for themselves. That's what changes things. And this would be true even if they didn't use blockchains! If you throw out all that custom ownership logic, you lose the core of what makes an NFT an NFT. Now it's just a few dozen bytes that anyone can mimic.

> smart contracts are meticulously designing a custom form of ownership

Not sure what you mean by custom form of ownership. If you are talking about fractional ownership, even that isn’t new.

Contracts around ownership are built on top of legal system. Smart contracts provide automation around defining and execution the contracts. That’s cool and can be super low cost, but apart from the automation, there isn’t much that’s different from traditional contracts. They can still be challenged in court.

For example, if you had a contract that, upon your death, transferred all your money to your nurse, your spouse could still challenge that in court if the contract was created under duress or created when you weren’t of sound mind.

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

#395

Post by beaugunderson »

SamBam wrote: post #52
vmception wrote: post #13

> Medjedovic added that he'd taken on “substantial risk” in pursuing this strategy. If he'd failed he would have lost “a pretty large chunk of my portfolio.” (The 3 ETH he stood to lose in fees was worth about $11,000 at the time.) This is misleading, either intentionally or due to Medjedovic's incompetence. You can fork the current head of the mainnet blockchain to localhost and try infinite permutations for free to…

If anyone could perfectly predict what was going to happen in the next state then those with this ability would only ever make money and never lose it. Yet this can't happen. In the real world there are sniper bots and all sorts of other things that another agent could do in parallel with your own script, which would lead the outcome to be uncertain.

> Yet this can't happen.

You don't even need to perfectly predict the next state to make risk-free attempts; you merely need to submit your transactions using flashbots (which operates a gateway directly to the miners). You pay a portion of your profit to the miners as an incentive to include your transaction, and if your transaction fails for any reason it fails atomically and is not included in the block, meaning you have paid no gas and your attempt is thus risk-free. One caveat is that this only works if the transactions can be assembled into a bundle within the same block.

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

#396

Post by beaugunderson »

xur17 wrote: post #149
vmception wrote: post #147

Earlier quoted context omitted.

He used some kind of MEV shielding thing. But I'm not sure if it went directly to miners or did something else.

Yeah, typically MEV shielding == sending directly to a mining pool that promises that not frontrun it. It's not a guarantee though, the miner could decide to still frontrun, or a small reorg could occur, and another actor could replace the transaction.

> It's not a guarantee though, the miner could decide to still frontrun

The transaction bundle will fail if the success criteria is not reached (often a certain level of profit), so the worst that happens is that the profit margin falls to that level or the transaction is not included with zero cost to the sender

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

#397

Post by Dylan16807 »

criddell wrote: post #394
Dylan16807 wrote: post #380

Earlier quoted context omitted.

Correct, blockchain itself doesn't mess with ownership. But NFTs and certain smart contracts are meticulously designing a custom form of ownership for themselves. That's what changes things. And this would be true even if they didn't use blockchains! If you throw out all that custom ownership logic, you lose the core of what makes an NFT an NFT. Now it's just a few dozen bytes that anyone can mimic.

> smart contracts are meticulously designing a custom form of ownership Not sure what you mean by custom form of ownership . If you are talking about fractional ownership, even that isn’t new. Contracts around ownership are built on top of legal system. Smart contracts provide automation around defining and execution the contracts. That’s cool and can be super low cost, but apart from the automation, there isn’t much…

No no you cut me off there. NFTs do it, and certain smart contracts do it.

If you get picky about the latter part, then I retract it and just say NFTs for simplicity.

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

#398

Post by criddell »

Dylan16807 wrote: post #397
criddell wrote: post #394

Earlier quoted context omitted.

> smart contracts are meticulously designing a custom form of ownership Not sure what you mean by custom form of ownership . If you are talking about fractional ownership, even that isn’t new. Contracts around ownership are built on top of legal system. Smart contracts provide automation around defining and execution the contracts. That’s cool and can be super low cost, but apart from the automation, there isn’t much…

No no you cut me off there. NFTs do it, and certain smart contracts do it. If you get picky about the latter part, then I retract it and just say NFTs for simplicity.

Ownership can’t be defined outside of the law. Ultimately these are boring old contracts in a digital form and they may or may not be valid. The validity can’t be determined within the NFT, smart contract, or blockchain. Some code may initiate a transfer of something and that gives you possession of it, but ownership isn’t guaranteed.

For example, you can write a smart contract that would watch for divorce papers being filed by your spouse and upon filing, you would transfer your Bitcoin balance or NFT to some other wallet. A court isn’t going to fall for that. You will be found to have hidden community assets (ie assets you don’t entirely own).

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

#399

Post by colinmhayes »

oldgradstudent wrote: post #362
colinmhayes wrote: post #345

Earlier quoted context omitted.

mixers are currently a market for lemons. No one uses a mixer on clean crypto. Hasn't been a problem, but I guess the government could start banning exchanges from accepting crypto that has ever been used at a mixer, although eventually won't it all pass through one?

No need to ban all mixers. Just blacklist any coin downstream of a blacklisted coin. If you intentionally involve yourself in money laundering, you can't really complain about your money being blacklisted. The ledger is public, which makes blacklisting trivial. No legal entity would be able to hold or trade blacklisted coins.

> Just blacklist any coin downstream of a blacklisted coin.

What does this mean? If a single blacklisted coin is put in a mixer then every other coin mixed together is blacklisted? You've just banned mixers. Eventually every single coin will be able to be traced back to a blacklisted wallet, so you've also just effectively banned crypto in the long run.

> No legal entity would be able to hold or trade blacklisted coins.

Mixers don't have to be entities though. No one owns them, no one is responsible for them. They're just code someone uploaded one day and promptly forgot about.

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

#400

Post by xur17 »

beaugunderson wrote: post #396
xur17 wrote: post #149

Earlier quoted context omitted.

Yeah, typically MEV shielding == sending directly to a mining pool that promises that not frontrun it. It's not a guarantee though, the miner could decide to still frontrun, or a small reorg could occur, and another actor could replace the transaction.

> It's not a guarantee though, the miner could decide to still frontrun The transaction bundle will fail if the success criteria is not reached (often a certain level of profit), so the worst that happens is that the profit margin falls to that level or the transaction is not included with zero cost to the sender

Is that something the mev apis implement? The Ethereum network would still include the transaction and just have it fail.
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