6 ms·

Interestingly 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

Interestingly 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-cuban-defi-iron-finance-crashed-100 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.

shadowgovt 5y ago
Hypothetically, what he's suggesting may not even need to be government-backed. An independent auditor, with reputation on the line, could, for a fee, offer independent coin analysis and risk assessment. Perhaps something similar to the Underwriters Laboratories model... knowing a coin was "Coincheck-certified" or something could give similar confidence to knowing the UL sticker on a lamp means it's a bit less likely to burn your house down.
- Nasrudith 5y ago
  That whole concept doesn't make any sense really. You don't have a lamp which can quietly turn itself into a plasma torch from a perfectly safe prior configuration. Yet any stable coin is an attractive nuisance basically - it involves keeping sizable money around doing nothing. As seen by pension raids that is a huge "steal me" sign. Even if you could keep it secure such an arrangement is fundamentally very entropic without it being a real currency with backing. It is still entropic but that is being used to sustain a nation state instead of bad finance which actively tries to avoid useful investments.
- kingaillas 5y ago
  >An independent auditor, with reputation on the line, I don't think this will matter. Moody's and S&P are two rating agencies that both failed to give useful info before the 2008 financial crisis. Their reputations weren't affected much as far as I can tell.
  - shadowgovt 5y ago
    That's because most of the financial world stumbled. The rating institutions won't take a big hit for blowing a call that 90% of the industry also blew.
raziel2701 5y ago
Wow, billionaire gets rug pulled after promoting it just last week, and now he's calling for government regulation.
diveanon 5y ago
His wallet address is available online, by my math he lost about $8 million.

shadowgovt 5y ago

Hypothetically, what he's suggesting may not even need to be government-backed. An independent auditor, with reputation on the line, could, for a fee, offer independent coin analysis and risk assessment. Perhaps something similar to the Underwriters Laboratories model... knowing a coin was "Coincheck-certified" or something could give similar confidence to knowing the UL sticker on a lamp means it's a bit less likely to burn your house down.

Nasrudith 5y ago
That whole concept doesn't make any sense really. You don't have a lamp which can quietly turn itself into a plasma torch from a perfectly safe prior configuration. Yet any stable coin is an attractive nuisance basically - it involves keeping sizable money around doing nothing. As seen by pension raids that is a huge "steal me" sign. Even if you could keep it secure such an arrangement is fundamentally very entropic without it being a real currency with backing. It is still entropic but that is being used to sustain a nation state instead of bad finance which actively tries to avoid useful investments.
kingaillas 5y ago
>An independent auditor, with reputation on the line, I don't think this will matter. Moody's and S&P are two rating agencies that both failed to give useful info before the 2008 financial crisis. Their reputations weren't affected much as far as I can tell.
- shadowgovt 5y ago
  That's because most of the financial world stumbled. The rating institutions won't take a big hit for blowing a call that 90% of the industry also blew.

raziel2701 5y ago

Wow, billionaire gets rug pulled after promoting it just last week, and now he's calling for government regulation.

diveanon 5y ago

His wallet address is available online, by my math he lost about $8 million.