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SafeDollar ‘stablecoin’ drops to $0 following DeFi exploit on Polygon
- Applejinx 5y agoZero counts as stable. Nothing further is ever going to happen to that price, I'll bet :)
- jandrese 5y ago[Mr. Burns looks through a portfolio of his old stocks] Mr. Burns: Hmm, let's see..."Confederated Slave holdings." How's that one holding up? Blue Haired Lawyer: It's, uh, steady.
- yetihehe 5y agoThis situation resembles more that one episode of Rick and Morty where Rick changed value of blemflarck[0] from 1 to 0. [0]https://rickandmorty.fandom.com/wiki/Blemflarck https://rickandmorty.fandom.com/wiki/Blemflarck
- tumblewit 5y agoNot really. If owning a coin becomes illegal it can fall below zero where you are paying someone to take your coins. Something similar to oil happened a while ago when storage had become an issue so prices fell below 0$
- derefr 5y agoOil is physical; it takes up space, and needs special protections to not pollute the container it's stored in. Digital goods, meanwhile, can just be transferred permanently "into the void" (i.e. to an account without an associated key.)
- tumblewit 5y agoInteresting didn’t know this. I always assumed it had to go to someone else. So digital currency can’t go below zero (or where you are paying someone to take it off you).
- wizzwizz4 5y agoIf you delete your wallet, nobody has the money any more. “Sending it into the void” only helps with proving that fact to someone else.
- roywiggins 5y agoYou can just send to an arbitrary public key whose private key is unknown and unknowable. Eg nobody knows the private key corresponding to "00000000000000000000000" or whatever. The chances of someone stumbling across the correct private key is ~zero, even if that address is otherwise valid. https://www.reddit.com/r/Bitcoin/comments/3k8dnq/someone_has_got_cash_to_burn_40_btc_sent_to/ https://www.reddit.com/r/Bitcoin/comments/3k8dnq/someone_has...
- croes 5y agoThere is no void for digital data, it's always some kind of data storage. RAM, HDD, SSD etc. If the data is send to void it's gone.
- SheinhardtWigCo 5y agoThat is exactly the point of the comment you’re replying to.
- harikb 5y agoThis implies there isn’t any contract obligations/fine print at the point of link to real world / real identity (exchange). In a hypothetical world, if coinbase made you sign things at signup and later demanded money for the upkeep of the network caused by your own transactions, I don’t think you can say no to that easily. Compare this to an HOA demanding a $100k payment from each condo owner in the Miami condo repair / collapse story. Now let us assume that condo is worth less than $100k. I don’t think you can just walk away and abandon your condo. It is not about storage cost and transportation - it is whatever contract you agreed to when taking the investment or liability.
- IncRnd 5y agoWould you pay someone to take your $0 crypto coins away from you? That doesn't seem sustainable.
- sethammons 5y agoReminds me of a quote from someone at work in regards to a big bug: it is a self correcting problem - people will stop using and paying for it and it will no longer be a problem!
- ipaddr 5y ago"Notably, this is not even the first time SDO was exploited. " A week ago they had another issue.
- grape-eater 5y agoGod I wish that was me
- aerovistae 5y agoThere is no such thing as a stablecoin, it's a made up term to try to lend legitimacy to new crypto scams. And I say this as someone who just bought some Ethereum in the hopes of making a profit :)
- twox2 5y agoAll terms are made up by your definition.
- aerovistae 5y agoSure, that's true although it's just semantics. I'll be unreasonably specific then: the term stablecoin was made up with harmful intentions to deceive and mislead in order to make a profit off others' losses.
- twox2 5y agoI'm not sure I agree, but it will be hard to convince you if you're coming from a place where you think crypto is scammy/deceptive to begin with. Let me assume you're willing to suspend your disbelief: I do agree that some stablecoins are scammy in nature, but others serve an important purpose and that purpose is to allow individuals and enterprises to navigate doing business in crypto despite crypto's high volatility. Where is the deception in that?
- NationalPark 5y agoIsn't the whole value of your ethereum based on people using it for these kinds of scam projects?
- aerovistae 5y agoAbsolutely.
- cutler 5y agoMaybe the world just needs less people trying to get something for nothing. If the scammers operating these currencies teach the greedy traders a lesson we'll all be better off.
- Tade0 5y agoPardon the pop culture reference, but did the attack happen to change its value from one of itself to zero of itself and was performed by a bitter, but highly intelligent man in his 70s?
- lgats 5y agohttps://www.youtube.com/watch?v=noQsHiTJAXo https://www.youtube.com/watch?v=noQsHiTJAXo
- lalaland1125 5y agoThese incidents really illustrate the main flaw of smart contracts: a single bug in your code can lead to incredible losses. I simply don't think it's possible for human beings to write good enough software for smart contracts.
- fasteddie31003 5y agoHow is that different from a traditional contract written by a lawyer? A single word could leave a huge unexpected hole in a traditional contract.
- duxup 5y agoThere's actually some chance that a poorly written contract, can be fixed / worked out between the parties involved.
- kortilla 5y agoThe difference is that disputes are resolved by humans who attempt to determine intent.
- tyre 5y agoBecause traditional contracts can be interpreted by a court of law and adjudicated with context. There's an entire field of contract law, with hundreds of years of precedent to fix very obvious human errors, like a typo where neither party could have possibly meant what is "technically" in the contract.
- hexo 5y agoSuch stable, much wow. Doge approves!
- 6a74 5y agoSo what type of exploit is this? Is this a problem with smart contracts? Could this be a problem for other cryptocurrencies with smart contracts, like Ethereum?
- kcy1019 5y agohttps://polydex.medium.com/plx-locker-smart-contract-incident-post-mortem-75342124a3e8 https://polydex.medium.com/plx-locker-smart-contract-inciden...
- tylersmith 5y agoIt was an issue with a specific contract, not the contract VM or the chain itself. It's absolutely a problem for other poorly written contracts, but not a systemic problem for all smart contracts.
- deleted 5y ago[deleted]
- Sohcahtoa82 5y agoUsing smart contracts, people are creating cryptocurrencies within an Ethereum network. Sort of a blockchain-within-a-blockchain. Right now, Polygon is a popular alternate Ethereum network for doing these. The problem of course, is that once these contracts are published onto the network to create your new cryptocurrency token, it's very difficult (perhaps impossible?) to update them. And of course, if someone finds a vulnerability in one of the contracts and exploits it, it's game over. There's no reversing the transfer of tokens. So to give a more explicit answer to your question, it's not a problem with Ethereum, but a problem with the contracts people are writing on the Ethereum network.
- kj4ips 5y agoThis is most likely a problem with this specific smart contract, from what I understand, if the EVM on the "winning" miner were to produce a state transition that did not faithfully follow the SC, that block should be rejected. Polygon is a little different, due to its proof of stake system, where there is no "winner" and the validators (Heimdall instances) "check" the work of the actual block producers (Bor instances). It also has a slasher-like element where only one Heimdall instance needs to prove that a block is incorrectly executed for it to be rejected, so a malicious actor would need to compromise all active Heimdall instances to be able to lie.
- progbits 5y agoIs there a website along the lines of istheshipstillstuck.com or arewewebyet.org but for "Is that coin / smart-contract dead already" ? Would be an useful reference in this ever-changing landscape, though I would pity the maintainers.
- hboon 5y agohttps://rekt.news/leaderboard/ https://rekt.news/leaderboard/
- meepmorp 5y agoThat's amazing.
- progbits 5y agoIndeed, wonderful! Thanks hboon (and viksit).
- somedude895 5y agoIs there one for all the scam ICOs from 2017/2018? I'm ashamed to admit I fell for one called KYC and one called Crc, which was supposedly supported by Crytek or something. It was just a hundred bucks, but I've always wondered what happened to that one given that it had a well known brand tacked on.
- viksit 5y agoYes - Rekt. https://www.rekt.news/leaderboard/ https://www.rekt.news/leaderboard/
- deleted 5y ago[deleted]
- BrissyCoder 5y agoLooking forward to Tether taking top position on this leaderboard and beating 2nd place by a factor of 1000.
- yawaworht1978 5y agoYou could also say it only lost 1usd in relative value./s
- omk 5y agoA point that most crypto heads miss is that the world does not run algorithmically. Legal contracts do not work like a software program and that characteristic is a feature not a bug. Not being able to reverse transactions that were part of an exploit is in infact a bug. Businesses need that tolerance for error. You need an oracle in your system. The oracle can maintain transparency of the attestations carried out if that is what matters. An extreme anti-establishment view is driving most crypto enthusiasts into opting for tech that isn't going to remain in everyone's interest for too long. These lessons started with DAO.
- MattGaiser 5y agoIndeed. Credit cards are far less decentralized than cash. But because credit cards have an administrator to protect the consumer, they are also preferable to cash.
- drcross 5y agoThe majority of people in the world can't get a credit card.
- wnevets 5y agobut they can get and use {meme}coin?
- toomuchtodo 5y agoThis is true, but with that said 54 countries have instant payments [1] [2]. This number will only grow, as you’re just pushing messages around queues. Once Congress lit a fire under the Fed, it’s only taking ~4-5 years to roll out instant payments in the US. This is very fast for such endeavors. Your average financial consumer in most countries is going to trust their bank and government to protect their fiat vs cryptopunks, blockchains, “smart contracts”, and “stablecoins”. To compete with fiat, you need to sell trust and recourse, not speed, and that’s something crypto inherently doesn’t support. (No need to point out Venezuela and the like about where crypto might have a chance, ground truth shows those folks overwhelming used Zelle and clandestine US deposit accounts to circumvent government monetary controls [3] [4]) [1] https://www.moderntreasury.com/journal/real-time-payments-around-the-world https://www.moderntreasury.com/journal/real-time-payments-ar... [2]https://empower1.fisglobal.com/rs/650-KGE-239/images/Report_Flavors_of_Fast_2019.pdf https://empower1.fisglobal.com/rs/650-KGE-239/images/Report_... (pdf, start at page 30) [3] https://www.coindesk.com/venezuela-is-a-testing-ground-for-digital-dollarization-and-zelle-doesnt-like-it https://www.coindesk.com/venezuela-is-a-testing-ground-for-d... [4] https://mobile.twitter.com/jp_koning/status/1254009112263868416 https://mobile.twitter.com/jp_koning/status/1254009112263868...
- qwertox 5y agoIs this a bug in Polygon? Just this weekend I was listening to Software Engineering Daily "Polygon: Connecting Ethereum Compatible Blockchain Networks with Denis Ermolin" (from June 2 2021) [1] There was a lot of talk about how secure Polygon is. [1] https://softwareengineeringdaily.com/2021/06/02/polygon-connecting-ethereum-compatible-blockchain-networks-with-denis-ermolin/ https://softwareengineeringdaily.com/2021/06/02/polygon-conn...
- danielvf 5y agoNo, this was purely a bug in the SafeDollar code.
- paulpauper 5y agoI thought it was $248 million. 248k is tiny for a stablecoin.
- cs702 5y ago"SafeDollar" -- what an an unintentionally but perfectly Orwellian name! Nonetheless, I feel bad both for the people who worked hard to create this failed cryptocurrency and for the victims who suffered these sudden losses. It's hard to write bug-free code. One way to help prevent bugs is to make languages less powerful. In hindsight, it seems that Satoshi Nakamoto's decision not to make Bitcoin's scripting language Turing complete, making all sorts of bugs impossible, will prove to be a smart choice over time. It forces applications of Bitcoin that require control flow to be executed off the main chain.
- encryptluks2 5y agoI only feel bad for them to an extent. Many people are entering the crypto-space solely on hype hoping to get rich quick but honestly have no clue what they are doing and have way too much cash to burn.
- X6S1x6Okd1st 5y agoThis is a pretty small drop for the space. This is a good news aggregator for rugs (exit scams), bugs & more: https://www.rekt.news/ https://www.rekt.news/
- viksit 5y agoIt feels like the mainstream adoption of tokens is going to need the equivalent of FDIC coverage / credit card transaction dispute systems. Is it theoretically (or in practice) possible to reverse / mitigate these kinds of token transfers? How would we even think about that?
- buggythebug 5y agowhat?
- renewiltord 5y agoThis stuff always has the vague feeling of pirate treasure type stuff. Like you’ve got a map with a red X on it and you then go look for the treasure and it’s got all these traps and stuff and then bam! Treasure! But then the pirates come after you.
- Animats 5y agoThis was a stablecoin backed by two other stablecoins? What's the point? Now you have multiple points of failure and no upside.
- chizhik-pyzhik 5y agoThe fact that this is trending on HN shows how little hacker news knows about the cryptocurrency space. A relatively unknown, recently launched stablecoin collapsing is not big news in crypto. Now if dai, usdc or usdt had failed, that would be a big deal.
- rednerrus 5y agoUSDT failed a LONG time ago.
- rawtxapp 5y agoWhat is failure specifically? USDT (despite it's shadiness) trades at 1USDT:1$ on pretty much all exchanges and you can short it if you truly believe it'll flop anytime soon.
- rednerrus 5y agoThe question is are there really $1 USD for every $1USDT? The answer is surely not. You may be able to get your money out today but in the long run there is nearly a 100% chance you lose it all. https://bitfinexed.medium.com/tether-is-setting-a-new-standard-for-transparency-that-is-untethered-from-facts-deec42c473bb https://bitfinexed.medium.com/tether-is-setting-a-new-standa...
- rawtxapp 5y agoThere isn't 1$ 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.
- Hallucinaut 5y agoThe failure spoken of is clearly the breach of the promise (and associated changing of literature) to back each by one USD. However I'm very interested in the idea of shorting a "stable"coin. Who would possibly enter into this contract for an asset that has an upside of zero and a (potential, long-term, depending on your bearishness) downside of 100%? In any case, with the strong likelihood Tether themselves are effectively shorting it by selling it unsecured by any real assets it would be a tough market to get in on.
- chrisco255 5y agoI honestly don't understand why this coin even makes the news. At $250K it was less than a microcap penny token. It's insignificant and not worth a print.
- ayngg 5y agoBecause this is the kind of story that cryptocurrency detractors love, and that aligns with the general sentiment towards cryptocurrencies on HN.
- SavantIdiot 5y agoOdd: HN is made up of the people closest to cutting-edge technology on the planet, and yet sentiment is negative on cryptocurrency. Hmmm...
- fleddr 5y agoIt's odd indeed. This is a VC-created forum where its users reject entire sectors of new technology. Besides being anti-crypto, there also anti-google, anti-iot, and anti-any website looking fancier than something from 1996. It's a thing to accept and be entertained by I guess. The stunning lack of self awareness over here is legendary though.
- SavantIdiot 5y ago> The stunning lack of self awareness over here is legendary though. Yes, indeed.
- pnt12 5y agoOn another perspective, maybe HN is anti-scams, pro privacy, pro privacy and pro UX. No other discussions face such criticism, only crypto. Does everyone believe them with a burning passion? Or are people afraid of losing money? "It is difficult to get a man to understand something, when his salary depends on his not understanding it."
- 5y ago
- lazzlazzlazz 5y agoThere are more than $100b of stablecoins — 285x year-over-year growth — with a variety of very interesting and high-quality stablecoins proliferating. And of course, Hacker News focuses on some garbage project nobody in the space even followed. How is there no discussion about FRAX, Maker's DAI, USDC, CRV's 3pool token, Liquity's LUSD, and so many other interesting projects?
- davesque 5y agoThere probably have been previous discussions about those projects. But yeah, the project relating to this headline is not news worthy. It's HN; go figure.
- pavel_lishin 5y agoBecause there's nothing interesting about them. They're just another variation on the same ol' "we peg our value to the dollar(*)!" pitch. The interesting stuff happens when they fail.
- aqme28 5y agoI think they way they peg their value to a dollar is interesting, because there are so many different strategies now. Some are via reserve dollars, some via collateral based on an oracle, some via collateral not based on an oracle, some are tightly coupled, and some are a bit looser.
- bvaldivielso 5y agoYou can be dismissive about literally anything that way. Computers: another variation on the same ol' "input in, output out" pitch. You find stablecoin's failures interesting. Crypto enthusiasts (which admittedly are a tiny fraction of the people holding cryptocurrencies) do too, while at the same time finding the pegging mechanisms interesting as well
- lazzlazzlazz 5y agoI couldn't disagree more. All of the projects I listed have radically different mechanisms, failure conditions, capital efficiencies, and value capture abilities. It's a fascinating space that is in its infancy. And you're missing projects that aren't pegged to the dollar, but instead have dampened volatility floating price targets — like Reflexer and OlympusDAO. It's a rich, beautiful corner of a rapidly growing space.
- runbathtime 5y ago> As a result, SafeDollar’s price—which was supposed to always be equal to $1 since it’s a stablecoin—has plummeted to zero, according to the protocol’s own website. Any defi project can all themselves a stablecoin. It is false advertising to say that you will maintain the peg to a dollar if you cannot meet that promise. If you are just experimenting or trying to get something for nothing (synthetics- created out of thin air 'backing' your stablecoin), then don't make claims that it will be a dollar. Also, selling unregistered securities is illegal. Operating a money exchange business is a crime without license.
- jt2190 5y agoThey've posted a post-mortem https://safedollar.medium.com/safedollar-post-mortem-analysis-cb2769fe059 https://safedollar.medium.com/safedollar-post-mortem-analysi...
- okareaman 5y agoI am not a good enough programmer to bet significant amounts of my life savings on my ability to write bug free code
- davesque 5y agoA $250k market cap token goes under and it makes the front page of HN. I think that sheds light on both the bias and extent of knowledge of the average HNer with regard to blockchain tech.
- abzfd 5y agotezos has formally verifiable smart contracts for exactly this reason
- tfang17 5y agoAny coin with the word "Safe" in it, probably isn't safe.
- rsync 5y agoIs there speculation, to match my own, that a fatal flaw in a stablecoin such as this was placed there on purpose ? Probably not in this case as one wouldn't "liquidate" the stablecoin at merely $250k of assets ... but wouldn't this be a viable (albeit, nefarious) mechanism to defraud crypto investors ?
- jhgb 5y agoTo be fair, zero is a very stable number.
- deleted 5y ago[deleted]
- joelbondurant 5y agoShould have used MongoDB.
- vecinu 5y agoThe funniest, most ironic part is the ad at the top of the page, "Earn up to 12% APY on Bitcoin, Ethereum, USD, EUR, GBP, Stablecoins & more." I'm so tired of people manipulating others and telling them to throw their savings into "Stablecoins" for 5-12% APR. Pure insanity.
- armatav 5y agoWhy not just have a version 1 smart contract, that inside of it has an amount check that, if passed, rewrites the smart contract (or issues a new one) - version 2 - that rectifies the problem? So people who "agree" with the change can just insta-exchange their cash, and those who don't can keep their cash on version 1. Then you don't have bugs like this as easily anymore. This whole thing will no go very far without something like an update system. The old C programmers would laugh their ass of at a code-once-and-hope mentality. EDIT: And by rewrite I mean like how OTA updates "rewrite" things, have a coin-bootloader or something that takes care of it.
- nlitened 5y agoWhat is the point of a smart contract that its owner might update on a whim? Just deploy an HTTP server.
- armatav 5y agoI think the whole point of the post is that you can move your coins to the new protocol through an exchange mechanism, or stay put. Unlike a deployed server.
- knownjorbist 5y agoAny major smart contract updates over time, but in some cases they back themselves into a corner with a bug.
- armatav 5y agoThat makes sense, like a bug too scuffed to allow a recovery.
- yawaworht1978 5y agoBuy the dip /S
- puranjay 5y agoI lost money in this. AMA I guess?
- lucasnortj 5y agoLol smart contracts and blockchain are for tinfoil hat wearing people who need to get a girlfriend
- programmarchy 5y agoThis coin made a mistake so its stakeholders pay the cost. People who had nothing to do with it are essentially unaffected. In fiat world, if big industry or finance makes a mistake, the taxpayers are forced to bail them out instead of allowing them to fail, because of some perceived “systemic risk” that could take down the entire national economy.
- qwerty_clicks 5y agoVery surprised MATIC value didn’t drop on this news
- andxor 5y agoThis has absolutely nothing to do with Polygon.
- m00dy 5y agoI see a lot of negative comments about blockchains in general here. We are now trying to build a new world order and It is purely built on code. Of course, we will have issues like this. Nothing is perfect.
- soared 5y agoIsn’t that a tautology?
- BrissyCoder 5y agoGreat satire.
- Animats 5y agoPost-mortem from the promoters: [1] Not very helpful. [1] https://safedollar.medium.com/safedollar-post-mortem-analysis-cb2769fe059 https://safedollar.medium.com/safedollar-post-mortem-analysi...
- deleted 5y ago[deleted]