>Non-collateralized stablecoins read: "ponzi scheme". This is pretty funny.
You used to have to build your Ponzi scheme, now it builds itself and is fully automated. Such advances. Much technology. Wow.
The collapse of the IRON stable coin
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Re: The collapse of the IRON stable coin
#72I found this article interesting, but the HN title ("Off-by-one error...") doesn't match the article's, or its conclusion?
The article mentions a boundary condition ("_share_price > 0"), not an off-by-one error.
Re: The collapse of the IRON stable coin
#73This is good for USDC right? Because it's $262 million that they don't have to pay back? >EDIT: I’ve since learned that the developer(s?) behind this are already the laughing stock of the DeFi community, having wrecked each of their 3 previous projects (now 4) — though this might be their biggest hit yet And people poured $262 million into this?
As I get older, I do not understand how known scammers, especially the ones that raise millions over and over, get support time and time again. If not in jail, why do they still get jobs. I know some who just told me in my face that they were scammers of millions (or simply were happy screwing people even with viable ways out) and they raise money again, screw people again etc. People do use Google right? Due diligence?
Re: The collapse of the IRON stable coin
#74Earlier quoted context omitted.
USDC represents a claim on USD, but why would Circle want to help out this contract and lose 262 million? If a stablecoin issuer like USDC can make arbitrary decisions to null any USDC token and they use that power, that is a good argument for the point that they are not following aml/kyc on every hop or transaction of USDC, even though they are allowing the transfer of dollars behind it. USDC can be charged with vio…
> but why would Circle want to help out this contract and lose 262 million? Probably a rhetorical question, but they might decide that it's a price they can pay for trust in their system. Not sure if I understood where the real value currently is though.
USDC's system didn't fail. The money transmitter (smart contract- IRON/TRON) failed, if the USDC is indeed 'locked' or not able to be transmitted. USDC can't be compelled by anyone to 'fix' this.
If USDC can revoke any p2p transaction of USDC, that means that they can revoke the transmission of movement of dollars/reserves that USDC token represents. Implicit in that, means they have ultimate control or authority of all p2p transactions or transmissions, and they are not doing kyc/aml on all p2p transactions, thus in violation of money transmitter laws.
Re: The collapse of the IRON stable coin
#75Earlier quoted context omitted.
Yep, and btw, how can the price of anything be exactly 0? This doesn't sound right either.
Well, a price can go negative [1], so I wouldn't consider zero to be surprising. [1] https://www.cnbc.com/2020/04/26/why-oil-prices-went-negative...
A price can go negative for a physical thing which requires upkeep, but I don't see how a coin which imposes no obligations on an owner who just chooses to walk away, can have a negative price?
Re: The collapse of the IRON stable coin
#76Here’s an arbitrage opportunity. Since the price of TITAN is 0, it only takes a small amount of $ to buy a vast amount of TITAN coins. Buy the locked out IRONs at a discount. Keep buying TITAN at $0 until it moves beyond $0 to satisfy the greater than 0 constraint on IRON. Cash out the IRONs.
I think that's why IRON is trading only slightly below the value of the locked collateral, instead of going down to zero.
Re: The collapse of the IRON stable coin
#77Re: The collapse of the IRON stable coin
#78Earlier quoted context omitted.
>They are trading one legal authority for another, and this is agreed upon up front. Both parties agree that the code is the legal authority before entering into a contract, which is much different from evading authority after the fact. The parties might "agree", but who cares? If they are in the US, for example, and the two parties have a smart contract that breaks US contract law, one of the parties can file a laws…
Yeah I agree with that. Once the contract has executed, enforcement actions can certainly happen in meatspace. But do you not see the difference between: 1. A normal contract (legal or illegal) that requires outside enforcement in the first place to force parties to comply. 2. A smart contract (legal or illegal) that executes itself without outside enforcement and can be overturned later (not literally overturned, bu…
The vast majority of contracts in (1) does not need enforcing, because it is in both parties interest (at least long-term) to perform. Yes, there is implicit enforcement to some extent, but then "non-society" which don't even have that are not pretty places to be.
On (2), sure we can find ways to have the execution fail. In fact, anything where there is not fully escrowed payment/collateral/etc. can fail to execute properly if the other side does have not what it needs to deliver/or does not make it available on chain.
Re: The collapse of the IRON stable coin
#79Earlier quoted context omitted.
Not quite sure what you're saying, that you expect the DOJ to somehow overturn the judgements of smart contracts, with possibly anonymous participants or participants outside of the DOJ's jurisdiction?
I think the point is more that if you owe $200M to someone, a court is unlikely to accept "it's irreversibly stuck in a smart contract" as an out.
Sure, but if you both sign a legal contract to obey the outcome of the smart contract then no one owes anything, because the smart contract says that the $200M is gone.
Obviously this doesn't allow you get around laws such as warranties but I don't see why it can't be used if everyone agrees to it.
Re: The collapse of the IRON stable coin
#80Now everyone with USDC locked in the contract has a strong incentive to push the TITAN price above 0, in order to unlock their coins. OTOH everybody wants to dump TITAN at any price, but again only at a price >0. There should be an equilibrium where TITAN is valued exactly 1 tick above 0, if there is a concept of “tick” in TITAN.