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Solend seized $170M of user funds

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Re: Solend seized $170M of user funds

#81

Post by Spartan22 »

PragmaticPulp wrote: post #7

One of the themes in pro-crypto writings has been the idea that as long as you “do your own research” then the bad things won’t happen on your chosen cryptocurrency. The prevailing idea (among pro-crypto spaces) is that bad things only happen to other people who deserve them because they didn’t do the right research. Recently we’re seeing the bad things happen in more and more mainstream chains. Even famous NFT propo…

That's a straw man. Doing your own research doesn't guarantee protection against all scams or losses, it just increases it and scams and freezes are to be expected, that's why diversification and taking profits is key.

Very flawed argument.

Re: Solend seized $170M of user funds

#82

Post by jacobedawson »

iJohnDoe wrote: post #67
douglaswlance wrote: post #53

Earlier quoted context omitted.

>it needs to be better in every way It only needs to be better in enough ways to persuade enough people to adopt it such that it hits a tipping point and becomes the de facto standard.

No, it needs to be better in every way. If it’s not, then what’s the fucking point? Popularity and a better replacement are two different things.

Here's a new type of computer - it's exactly the same as your current computer, except it consumes 1/10th of the power...

A replacement doesn't have to be better in every single facet.

Re: Solend seized $170M of user funds

#83

Post by djbusby »

cowtools wrote: post #61
rvz wrote: post #58

Earlier quoted context omitted.

The pro-crypto folks have created the delusion that 'crypto will replace all modern finance' and they will quickly realise that regulations will wipe out the majority of tokens and projects unable to comply with them; and a remaining few of them existing and surviving. It also means the anti-crypto folks will also realise that destroying 'all of them' is another delusion that activists like the free software foundati…

>The undeniable fact is that regulations will be put in place for crypto why is this so undeniable? I would think well-implemented cryptocurrencies would be fairly regulation resistant

How would a technical implementation detail block legislation?

Re: Solend seized $170M of user funds

#84

Post by rglullis »

djbusby wrote: post #83
cowtools wrote: post #61

Earlier quoted context omitted.

>The undeniable fact is that regulations will be put in place for crypto why is this so undeniable? I would think well-implemented cryptocurrencies would be fairly regulation resistant

How would a technical implementation detail block legislation?

The point is not the legislation. The point is enforcement.

You can write and pass whatever law you want. If it can not be enforced, it does not exist.

Re: Solend seized $170M of user funds

#85

Post by csa »

cowtools wrote: post #61
rvz wrote: post #58

Earlier quoted context omitted.

The pro-crypto folks have created the delusion that 'crypto will replace all modern finance' and they will quickly realise that regulations will wipe out the majority of tokens and projects unable to comply with them; and a remaining few of them existing and surviving. It also means the anti-crypto folks will also realise that destroying 'all of them' is another delusion that activists like the free software foundati…

>The undeniable fact is that regulations will be put in place for crypto why is this so undeniable? I would think well-implemented cryptocurrencies would be fairly regulation resistant

Do an internet search for UIGEA for a blueprint on how to do this in the US.

Re: Solend seized $170M of user funds

#86

Post by renewiltord »

wronglebowski wrote: post #57
renewiltord wrote: post #26

Earlier quoted context omitted.

They don't have voting rights because they don't have SOL. They don't have SOL because they put it in there to get USDC+USDT. If they don't believe in the depth of the SOL/USD(C|T) books this could just be a way to sell SOL or go short SOL. This whale is probably just happy to default on the loan and get liquidated at this point.

Are they in the red on the loan? The numbers and functions are where I get confused. "a whale has deposited 5.7M SOL ($170M and borrowed 108M USDC and USDT borrowed)" So they put in 5.7 SOL at some price, and used it to borrow stablecoins? If their position is liquidated how does that play out? If he traded coin for coin how do they get the traded assets back?

He keeps what they gave him, they keep what they get from what he gave them.

Ideally they over collateralize. So if SOL is 100 USDT, he puts in 5 SOL and gets 50 USDT per SOL (250 USDT). If SOL approaches 50 USDT, (say 51 USDT) they sell the SOL he gave them and keep the proceeds (they have 255 USDT and are ahead by 5 USDT). The loan has reached an end condition.

Another thing that could happen is he does something with the 250 USDT loaned to him and he gets 300 USDT. He gives back the 250 USDT and gets back his 5 SOL and now has 5 SOL and 50 USDT (minus some small interest or fee). This is another end condition.

All works on the small scale. But presumably you can think of exploits on the large scale.

A simple one is that the loan is so large in that they can't liquidate without slippage (price moving as they sell causing them to gain less than they anticipated). In this case, they might want to exit a little earlier.

Re: Solend seized $170M of user funds

#87

Post by SilasX »

flaque wrote: post #34
55555 wrote: post #9

Sorry, I've read this again and now I think this has little to do with Solana and entirely to do with Solend, and I think they're separate. Maybe someone who knows more about the space can clarify things. I now presume the funds needed to be deposited in Solend's smart contract in order for the trader to borrow the funds against his collateral, and Solend is pushing a patch in order to modify the code so they can sei…

A better title would be "Solend seized $170MM of user funds". Claiming it was done by "Solana" is incorrect. Claiming it's to prevent a drop in Solana's price is clickbait & editorializing.

>Claiming it's to prevent a drop in Solana's price is clickbait & editorializing.

But … that’s one of the reasons they cite in justifying the proposal.

>> It'd be difficult for the market to absorb such an impact since liquidators generally market sell on DEXes. In the worst case, Solend could end up with bad debt. This could cause chaos, putting a strain on the Solana network. Liquidators would be especially active and spamming the liquidate function, which has been known to be a factor causing Solana to go down in the past.

https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxP...

Re: Solend seized $170M of user funds

#88

Post by yieldcrv »

PragmaticPulp wrote: post #7

One of the themes in pro-crypto writings has been the idea that as long as you “do your own research” then the bad things won’t happen on your chosen cryptocurrency. The prevailing idea (among pro-crypto spaces) is that bad things only happen to other people who deserve them because they didn’t do the right research. Recently we’re seeing the bad things happen in more and more mainstream chains. Even famous NFT propo…

That's not the impression I get about this one action being discussed, but odd take.

There are a variety of amateurish and hysterical things about this Solend project. Why don't you just talk about that project?

Like, how the liquidation won't be that bad? Or how half a million dollars in Solend tokens gets to vote to seize $170m of funds? those things are hilarious.

Re: Solend seized $170M of user funds

#89

Post by OtmaneBenazzou »

babyshake wrote: post #77
ReptileMan wrote: post #66

Earlier quoted context omitted.

Because you have to convert the crypto into fiat to procure goods and services and the state will just control the border. There will be cases in which a weak state economy can become bitcoinized the same way some have become dolarizesld, but for strong states it is easy to make the border between the currencies as tight as they want it.

Would these regulations prevent something like offshore merchants selling goods, perhaps gold bars or something, for crypto and converting into fiat?

well it already happens with cash, so no

Re: Solend seized $170M of user funds

#90

Post by [deleted] »

ReptileMan wrote: post #66
cowtools wrote: post #61

Earlier quoted context omitted.

>The undeniable fact is that regulations will be put in place for crypto why is this so undeniable? I would think well-implemented cryptocurrencies would be fairly regulation resistant

Because you have to convert the crypto into fiat to procure goods and services and the state will just control the border. There will be cases in which a weak state economy can become bitcoinized the same way some have become dolarizesld, but for strong states it is easy to make the border between the currencies as tight as they want it.

[deleted]
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