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SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

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Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#541

Post by jwlake »

raverbashing wrote: post #62
jwlake wrote: post #27

Earlier quoted context omitted.

Mostly it involves people making systems that are too complex to trivially analyze. You can not write arbitrarily complex secure code. You need to limit your scope and do one very simple thing extremely tersely and correctly. You can make powerful systems with simple correct independent components. You can not make complex secure monolithic systems. It gets even worse when you look at contracts with delegation. The p…

Yes, I agree. Most of the security of smart contracts should be in the VM. Things like self-asserting the results and only finishing the transaction if it actually passes a double-check. Or set value limits to each smart-contract (so even if there's a bug it will only operate on 0.00001 BTC for example).

This is mostly infeasible because the VM has no idea what's worth anything. There is no reasonable price in absolute terms for a BTC or ETH or DOGE or $DUMBCOIN.

The key is that the contracts need to be minimal and analyzable, so its ~100 lines of code you can manually analyze. Documented separately all the edge cases, or ideally removed through good design so they simply don't exist. A bunch of problems I've seen in the real world of crypto are annoying edge cases that you can fix with an if statement, or ideally change the design to remove them completely. It's actually a surprisingly hard space because you're trying to make terse, complete and secure code.

In normal web/systems programming you have layers of security; internal services, external services, firewalls, access controls, vpns, security by obscurity, etc etc etc. In crypto you have none of that. Everything is 100% public, the code probably should be published, or else it is trivially decompiled. If there is a problem someone will find it if there is value in finding it.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#542

Post by johnnyfived »

rawtxapp wrote: post #406
rednerrus wrote: post #388

Earlier quoted context omitted.

The question is are there really $1 USD for every $1USDT? The answer is surely not. You may be able to get your money out today but in the long run there is nearly a 100% chance you lose it all. https://bitfinexed.medium.com/tether-is-setting-a-new-standa...

There isn't 1$ for every 1USDT, they said so themselves. It will eventually fail != "USDT failed a LONG time ago". If you truly believe what you say, then you should definitely consider shorting it, if you're right you'll make a lot of money.

Nobody that's ripping on tether in here is going to short it lol, they're not that confident in their own words.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#543

Post by Aperocky »

xur17 wrote: post #505
Aperocky wrote: post #492

Earlier quoted context omitted.

It only really works on good times (read low interest rates). Good thing that the national debt is also out of control, which kind of restrict Fed's ability to raise interest rates without bankrupting the government.

I'm confused. Why are low interest rates required for stablecoins to work? If anything, for centralized stablecoins, high interest rates would mean more revenue for the corporation holding the assets.

low interest rates means there are abundance of US dollars floating around for people to engage in things like stable coins.

high interest rates means less growth for any assets as liquidity gets tied/dries up.

Interest rates are cyclical, all high interest rates cause a period of pain and death for semi-ponzi schemes that works during periods of low interest rates.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#544

Post by r3trohack3r »

capeterson wrote: post #527
r3trohack3r wrote: post #198

Earlier quoted context omitted.

I’m making an assumption here that “crypto” means “crypto coin” and, perhaps further, any form of blockchain based, consensus maintained, public ledger. I don’t understand this “crypto is good for doing crime” narrative. When I’m doing crime, I strongly prefer there to be no record of the transaction. The closer I can get to an assurance there is no permanent record of the transaction, the safer I feel in deviating f…

This just isn't correct. Public ledger cryptocurrencies are able to be digitally transferred without any form of personal identification, unlike almost any other form of payment. Just because the ledger is public does not mean that one's identity is public, merely the addresses involved in the transaction are public. If there is nothing tying one's identity to an address or transaction, then the transaction being pub…

I agree with you. But I think there is nuance. When I hear “crypto is good for crime” I hear “crypto is good for all criminals” (where “criminal” is anyone conducting an illegal $$ transaction).

In your process, my statement was 100% talking about the “customer” steps. You’re right. But, at scale, it’s hard to conduct any crime that doesn’t leave a record. At the many millions of dollars of revenue scale, I could see crypto being a trade-off conversation.

> Public ledger cryptocurrencies are able to be digitally transferred without any form of personal identification, unlike almost any other form of payment.

Absolutely correct. But for any crime I’d likely commit, I’d be operating at a scale where anonymity would be hard to achieve. For example, I’d be hard pressed to acquire Bitcoin in a way that didn’t associate the wallet with my identity (if you have methods, please share!). For most transactional crimes I’d likely commit, I’d substitute “show up with cash for crime” with “show up with cash for Bitcoin, then use Bitcoin for crime.” It seems like an extra, unnecessary, step. Cash is already a record-less value transfer system.

> Further, this point is completely nullified by the fact that there are private ledger cryptocurrencies

I’m not sure if we are arguing semantics on this one. But my understanding of tech like Monero and ZK-snarks is that the ledger IS public, but it’s a bunch of locked boxes. Without the keys you can’t see the contents of the ledger. But now you’re in a race against time between implementation bugs (or broken crypto) and the statute of limitations. It’s not enough to audit it yourself. You’re not betting that _you_ couldn’t break it _today_, but that _no one_ will _ever_ break it. The incentive model seems broken. My crime may not be of interest, but I’m committing the transaction to the same ledger where nation states may have interest in decrypting other transactions. I can’t “uncommit” my transaction if the crypto falls to a nation state; my private business becoming public will just be collateral damage.

At a small scale, I’d much prefer taking a one time risk of conducting a no name cash transaction.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#545

Post by akerl_ »

G3rn0ti wrote: post #210
adtac wrote: post #156

Earlier quoted context omitted.

If you steal my credit card and buy things with it, I will call my bank and I won't need to pay for it when I settle my statement balance at the end of the month. The bank will follow up with the merchant and/or law enforcement and, in most cases, the bank will get its money back somehow. In the cases where it doesn't, I'm sure the bank is insured against losses. Banks and insurance companies probably have a complica…

But there is a price to pay for the responsibility you burden off onto the bank. Banks charge fees, pay almost zero interest (at least currently) and are usually very unpleasant to deal with when you want to borrow money. I’d say it depends. You probably shouldn’t manage your life savings using a crypto wallet. Keep some money at a bank. Keep some money in cryptos. Cryptos are not a solution to every financial proble…

Crypto transactions have fees, crypto wallets don’t accrue interest, and my exchange won’t loan me coins. So I’m not sure this is the slam dunk on banks that you were going for.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#546

Post by viraptor »

fleddr wrote: post #532
viraptor wrote: post #452

Earlier quoted context omitted.

> With Bitcoin, having lots of coins doesn't give you any new free coins, unlike fiat money. Fiat money doesn't give your free money either. You have to invest in something - and there's plenty of fee-limited options in the cryptocurrency world as well. > And this isn't a vague promise, some 60/70% of the hashrate from China, which include most coal-based mining, is being wiped out in just a few weeks. Because the pr…

Fiat money does give you free money. We happen to live in exceptional times where interest rates are close to zero, but in general, simply owning fiat gives you free new fiat. The same is not true for Bitcoin in itself. Nobody wants to help the environment. The typical US lifestyle would require 8 planets if it was rolled out across the world's population. Just leaving your phone plugged in uses more energy than all…

Owning fiat does not give you free money. Giving it to a bank which will pay you interest on the account (or various investments) is what gives you more.

But the same applies to BTC with BlockFi / BIA.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#547

Post by Retric »

rawtxapp wrote: post #479
Retric wrote: post #465

Earlier quoted context omitted.

Even then you are limited things to people who are willing to break the law and have a giant sign pointing them as a likely culprit.

I mean people short crypto all the time, averaged over a long enough period of time long/short ratios are roughly ~50/50 [1]. It's normal market behavior. And if you're shorting one of the big ones, you can most likely do it on defi without even providing a name. 1: https://www.bybt.com/LongShortRatio

Let’s assume something like 100 people have very large* short positions on a system that goes down. Dropping the possibility from X,000,000,000 to 100 is quite a big deal.

*very large being required for significant money to be at stake, making say 10k illegally from a short is hardly going to inspire a lot of effort.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#548

Post by [deleted] »

fleddr wrote: post #516
Karrot_Kream wrote: post #500

Earlier quoted context omitted.

Shrug it's happening throughout technical circles, at least in the English-speaking world. It's one thing to try to push back against politics that you feel are harmful and disenfranchising, in purely political or social forums. It's another when technology forums develop taboos on what technology you can and cannot discuss. I agree it's cultural, but folks who are immersed in the culture don't seem to be willing to…

I know what you mean. I suppressed that reasoning in my other comments as it tends to make things worse, but I might as well spit it out: it's US culture. The US has always had a binary culture: winner/loser. Democrats vs Republicans. Success or failure. No room for nuance or a gray zone. Nothing new, but now brought to truly explosive levels of polarization. We all know why. This mentality has now made its way into…

[deleted]

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#549

Post by WalterSear »

hanniabu wrote: post #519
vecinu wrote: post #401

Earlier quoted context omitted.

You're literally talking across yourself, at least that's how I read it. Your first comment [1] > As long as everyone agrees i see absolutely no problem and now > Some agreed, others didn't...Consensus doesn't require everyone to agree, just the majority So you literally just said there is a problem. [1] https://news.ycombinator.com/item?id=27666781

You're being pedantic, it's clear what was meant even if it wasn't properly stated.

It was clear that it was a contradiction even if you don't want to acknowledge it.

Re: SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon

#550

Post by SavantIdiot »

wavesounds wrote: post #442
SavantIdiot wrote: post #331

Earlier quoted context omitted.

Odd: HN is made up of the people closest to cutting-edge technology on the planet, and yet sentiment is negative on cryptocurrency. Hmmm...

It's because so far all of these crypto currencies use terrible technology that is destroying the planet. There's nothing "cutting-edge" about block chain, it was a neat idea 12 years ago but since then it's proven itself to be a completely shit database.

Well, IMO, that's not entirely true. The idea of a hash-based unalterable ledger is still unique (what's a comparable strategy?), but is still finding its footing. I think a blockchain has applications, and maybe cryptocurrency will be one, but this is all in its infancy. Applications are still being considered, and implementors are learning that hard way that the intersection of monetary systems, economic feasibility, and security is nontrivial and some brogrammer can't just knock out a coin in a weekend and have it be meaningful. I think it will take at least another few decades for a real cryptocurrency to emerge (if one ever does) and even then it will probably be small-scale (bank interchange?) or for some other application and not a global consumer thing. It just has too many issues that no one has figured out yet (transparancy, insurability, privacy, energy cost, scalability, transactional cost, etc.)
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