The collapse of the IRON stable coin
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The collapse of the IRON stable coin
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Re: The collapse of the IRON stable coin
#2> The developers seem to have been earnest in their attempt to create a new kind of stablecoin , one that was only partially collateralized by a “real” stablecoin.
This space is a giant house of cards.
Re: The collapse of the IRON stable coin
#3Interestingly Mark Cuban got taken for a small amount of money by this and is already calling for regulation around stablecoins:
https://www.bloomberg.com/news/articles/2021-06-17/mark-cuba...
I read about it. Decided to try it. Got out. Then got back in when the TVL start to rise back up As a percentage of my crypto portfolio it was small. But it was enough that I wasn't happy about it.
But in a larger context it is no different than the risks I take [in] angel investing. In any new industry, there are risks I take on with the goal of not just trying to make money but also to learn. Even though I got rugged on this, it's really on me for being lazy. The thing about de fi plays like this is that its all about revenue and math and I was too lazy to do the math to determine what the key metrics were.
The investment wasn't so big that I felt the need to have to dot every I and cross every T. I took a flyer and lost. But if you are looking for a lesson learned , the real question is the regulatory one. There will be a lot of players trying to establish stable coins on every new l1 and L2. It can be a very lucrative fee and arb business for the winners.
There should be regulation to define what a stable coin is and what collateralization is acceptable. Should we require $1 in us currency for every dollar or define acceptable collateralization options, like us treasuries or?
To be able to call itself a stable coin? Where collateralization is not 1 to 1, should the math of the risks have to be clearly defined for all users and approved before release? Probably given stable coins most likely need to get to hundreds of millions or more in value in order to be useful, they should have to register.
Re: The collapse of the IRON stable coin
#4> The developers seem to have been earnest in their attempt to create a new kind of stablecoin , one that was only partially collateralized by a “real” stablecoin. This space is a giant house of cards.
The financial crisis of 2008 showed us that you can say the same about the traditional finance system.
Crypto is reinventing the same system as traditional finance and hitting all the same problems that we encountered in the last 100 years.
At least here everybody who opens their eyes can see that it's a house of cards.
Re: The collapse of the IRON stable coin
#5This has always been the problem with smart contracts. They are infact dumb contacts.
To program one you need to think about all the edge cases. The programmers here likely did want >0 here. The possibility that the thing feeding price data return zero incorrectly was higher than the price legitimately being zero in their minds.
There is no court or lawyer who can interpret the spirit of the contract.
Re: The collapse of the IRON stable coin
#640 years ago, financial innovation involved finding new affinity groups to sell credit cards to (and others I'm sure but that was a scam I saw firsthand).
It wasn't any more honest than this; it was just kept quieter with private meetings and less publicity for the collapsed scams.
I'd be looking for the banker-adjacent people in these. The folks that don't work for the banks directly, but consult; somehow always seem to have some extra connection to someone at the bank, related, married, side projects...
Re: The collapse of the IRON stable coin
#7This has always been the problem with smart contracts. They are infact dumb contacts. To program one you need to think about all the edge cases. The programmers here likely did want >0 here. The possibility that the thing feeding price data return zero incorrectly was higher than the price legitimately being zero in their minds. There is no court or lawyer who can interpret the spirit of the contract.
> There is no court or lawyer who can interpret the spirit of the contract.
That's obviously the point, though. You are trading one set of risks for a completely different set of risks that might suit your use case much better; your counterparty being able to contest a contract in court could very well be a "bad" thing for you.
Re: The collapse of the IRON stable coin
#8I wrote Skepticoin as a serious parody of Bitcoin. Articles like these about the "state of the art" of cryptocurrency make me wonder: would a parody of a more "modern" cryptocurrency even be recognizable as such?
Re: The collapse of the IRON stable coin
#9This 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?
Re: The collapse of the IRON stable coin
#10> The developers seem to have been earnest in their attempt to create a new kind of stablecoin , one that was only partially collateralized by a “real” stablecoin. This space is a giant house of cards.
The financial crisis of 2008 showed us that you can say the same about the traditional finance system. Crypto is reinventing the same system as traditional finance and hitting all the same problems that we encountered in the last 100 years. At least here everybody who opens their eyes can see that it's a house of cards.
"They are doing it too" is a favorite argument of crypto-enthousiasts. I'd argue the answer here is not more madness (crypto), but a serious attempt to fix the traditional financial system.