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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

#51

Post by thebean11 »

rednerrus wrote: post #42
thebean11 wrote: post #35

Earlier quoted context omitted.

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.

Your value prop has to outweigh the potential negatives or there is no value prop. What OP is saying is that you can't have unregulated markets in this space the incentives to cheat are too great.

Sure, and I'm not making an argument against regulation. My point is that there is nothing inherent in cryptocurrency to create these forms of fraud except the lack of regulation, otherwise the same fraud would exist in traditional markets.

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

#52

Post by mensetmanusman »

qeternity wrote: post #21
thebean11 wrote: post #17

Earlier quoted context omitted.

I wonder if this is actually unique to crypto, or if it's common in any industry where participants have a massive financial incentive to "cheat"? There's plenty of instances of hedge funds and stock traders acting like this. I bet there would be more if they were under as little regulation as the crypto exchanges..

Well, I spent most of my career as a hedge fund trader so I can also comment on this: of course everyone is looking for the upper hand and people will bend or break rules to achieve this. But this is universal to all games, and fundamentally the game is fair. In crypto, the game is not fair. The refs are players and there are no rules.

I think we learned in 07/08 that even when the game isn’t fair, no one cares, and no one goes to jail :)

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

#53

Post by audiometry »

qeternity wrote: post #43
felixbraun wrote: post #32

Earlier quoted context omitted.

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 ob…

> IMO people overestimate how much alpha is in knowing your customers’ positions (as exchange owner). I’ll say this as respectfully as I can: you’re wrong. Aside from algos, positions are the most closely guarded information in trading. If you know someone’s positions, you might be able to assess what their risk tolerance and stops would be, and you can exploit that. If you’re a crypto exchange with huge highly lever…

Agree. If someone knows your margin situation, they know where they need to push the price to stop you out. Simple as that. And when the exchange stops you out, they unload the position in the market at any price. This is not unique to Bitcoin. In China plastics markets same things happen. Opponents learn enemies’ margin situation from corrupt exchange and push till he is liquidated. I don’t think there is much new to Bitcoin in terms of trading and all the games being played. It has gone on in all the other markets long before this.

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

#54

Post by audiometry »

felixbraun wrote: post #45
qeternity wrote: post #43

Earlier quoted context omitted.

> IMO people overestimate how much alpha is in knowing your customers’ positions (as exchange owner). I’ll say this as respectfully as I can: you’re wrong. Aside from algos, positions are the most closely guarded information in trading. If you know someone’s positions, you might be able to assess what their risk tolerance and stops would be, and you can exploit that. If you’re a crypto exchange with huge highly lever…

I’m very sure that there is more money (for big high volume exchanges) in providing an environment with low liquidations (which amplify price moves against the index, again bad UX) instead of driving customers into them and profiting from trading these wicks. The biggest risk to established exchanges is ‘regulatory alienation’ — and having millions of USD in daily liquidations probably is not helpful here. Won’t say…

You don’t need the exchange to do this. You simply need corrupt employee of the exchange with access to the information.

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

#55

Post by space_rock »

zachmx wrote: post #37
space_rock wrote: post #27

Earlier quoted context omitted.

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.

They are pseudo decentralised. They have a point of failure. Take down the operator and the exchange is gone. Happened before with an ethereum exchange. Ethereum delegated some control to miners which isn't decentralised

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

#56

Post by space_rock »

yokem55 wrote: post #38
space_rock wrote: post #27

Earlier quoted context omitted.

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.

Ethereum delegated some control to miners for within block trading which isn't decentralised. Between block trading is possible but you'd have to wait 10mins for a trade

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

#57

Post by space_rock »

unclebucknasty wrote: post #46
space_rock wrote: post #25

Earlier quoted context omitted.

Can eBay pump up the price of it's own items with fake trading bots? No that's fraud. There are laws around auctions and trading. I'm guessing it's illegal

The key here is disclosure. If eBay was transparent with its bot activity, then it may be legal.

Not transparent and market manipulation change the situation entirely. And many govt agree and will happily put you in prison

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

#58

Post by space_rock »

vineyardmike wrote: post #48
space_rock wrote: post #27

Earlier quoted context omitted.

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

While i vaguely agree, crypto/blockchain/whatever has one unique aspect that is "valuable": It creates a scarcity in an internet full of abundance. You can copy/paste a JPEG or MP3 a million times (hello piracy), but you can't own an NFT or coin you don't actually own. Sure, you can copy/paste the underlying JPEG, but thats not the same. There will only be 1 blockchain owner. This unique property of scarcity is a val…

Blockchain does not equal bitcoin which created scarce money that can't be inflated which has value

Outside of money you don't need scarcity

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

#59

Post by ryan_lane »

vineyardmike wrote: post #48
space_rock wrote: post #27

Earlier quoted context omitted.

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

While i vaguely agree, crypto/blockchain/whatever has one unique aspect that is "valuable": It creates a scarcity in an internet full of abundance. You can copy/paste a JPEG or MP3 a million times (hello piracy), but you can't own an NFT or coin you don't actually own. Sure, you can copy/paste the underlying JPEG, but thats not the same. There will only be 1 blockchain owner. This unique property of scarcity is a val…

Except that you can mint the NFT on an infinite number of chains, since the chains are also digitally created. Sure, maybe you can't own one on _that_ chain, but really, who gives a shit?

In the end, this is a less interesting beany babies.

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

#60

Post by sizzle »

thebean11 wrote: post #23
qeternity wrote: post #21

Earlier quoted context omitted.

Well, I spent most of my career as a hedge fund trader so I can also comment on this: of course everyone is looking for the upper hand and people will bend or break rules to achieve this. But this is universal to all games, and fundamentally the game is fair. In crypto, the game is not fair. The refs are players and there are no rules.

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

Insider trading in Defi is rampant and unregulated for starters
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