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The fact that this is trending on HN shows how little hacker news knows about the cryptocurrency space. A relatively unknown, recently launched stablecoin colla

The 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 ago
USDT failed a LONG time ago.
- rawtxapp 5y ago
  What 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 ago
    The question is are there really $1 USD for every $1USDT? The answer is surely not. You may be able to get your money out today but in the long run there is nearly a 100% chance you lose it all. https://bitfinexed.medium.com/tether-is-setting-a-new-standard-for-transparency-that-is-untethered-from-facts-deec42c473bb https://bitfinexed.medium.com/tether-is-setting-a-new-standa...
    - rawtxapp 5y ago
      There isn't 1$ 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 ago
        The 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.
        rawtxapp 5y ago
        Which is why I asked what they meant by failure specifically. You have to borrow it to short it, so there's a 1-3% APY cost associated with shorting it. You have to calculate the tradeoff of the likelihood of it going to 0 within the next couple of years vs the cost of borrowing USDT to short it. Say you short 1M$ worth of Tether, it goes belly up within 4 years, it cost you like ~40k$ to short it, but your upside is 1M$. If it never actually fails because the market is irrational or by some miracle Tether was doing the right thing, then your cost depends on when you close your position. It's a relatively cheap way of making lots of money depending on your conviction on Tether's likelihood to fail.
        Budabellly 5y ago
        I bookmarked this comment from a few months ago on how one might make such a trade: https://news.ycombinator.com/item?id=26174690 https://news.ycombinator.com/item?id=26174690
      - johnnyfived 5y ago
        Nobody that's ripping on tether in here is going to short it lol, they're not that confident in their own words.
- slownews45 5y ago
  No kidding - each of the these crypto folks go "trust us" - and then even the simplest things (1:1 US Dollar backed coin - seriously - how hard is this!) turn out to be a full of crap and lies. And if you believe USDT has been 1:1 backed by us dollars for its full history - dream on. If you believed they would actually get audited when they said they would - hahah.
  - fleddr 5y ago
    Your statement "how hard is this" shows your complete incompetence regarding the backing of anything. Nothing of value is backed in our world. If a mere 7% of bank account holders go to the bank to collect their money, the bank collapses. They don't have your money, it's not there. If all owners of gold (gold value papers) today claim their physical gold, it can't be done. There's 400% more value paper compared to the total supply above ground. If all owners of Apple stock today decide to sell their stock all at the exact same moment, they won't get out the full market cap. Because the entire thing crashed before that. But that won't happen, because the exchange will simply stop the trade. Which is the same thing crypto exchanges do when things get too heated.
    - mike00632 5y ago
      The difference is that Apple doesn't claim to have a 1:1 reserve of dollars to back the value of their stock. It should matter to you that the USDT folks are lying (over something important).
      - fleddr 5y ago
        We're in agreement that lying about backing is wrong in any case, no argument there. I in particular object to the notion that things of value should be 100% backed by actual USD, in bank accounts or cash. That's not how liquidity works, yet a lot of people intuitively believe this to be so.
        Dylan16807 5y ago
        They said it wasn't hard, not that it was necessary in all circumstances. Banks and gold deposits re-lend money because it makes them money and they can sell the storage service for cheaper. If you want something that won't be loaned back out then you can buy that service pretty easily. And stock prices changing is a very different thing. The actual supply is there, and entire markets caps can and do get sold in things like mergers.
zionic 5y ago
Seriously. Meanwhile on boomer news > A single web server caught fire somewhere in Bolivia, is social media over? (+20000 points)
NationalPark 5y ago
I think it's pretty obvious that people here are very literate about the cryptocurrency space and just find it amusing, apparently to the chagrin of true believers.
- fleddr 5y ago
  Quite the opposite. It's valid, healthy and even recommended to have significant skepticism regarding crypto. I think that's fair game, as about 90% (or more) of coins are pump-and-dump schemes. Further, almost everything "Defi" is supremely risky, as they are completely unregulated, not insured, often lack liquidity, and can go down the drain at moment's notice. Fine. However, there's a general anti-crypto stance here largely based on outdated mainstream narratives that if you truly would be literate about crypto, could only laugh at. So this community is not "very literate", it doesn't even past the basic smell test.
  - ineedasername 5y ago
    I don't think there's a strong anti-crypto stance here. It strikes me much more as a strong anti crypto-fanboy stance. I'm not saying there's no one on HN who doesn't like crypto. I just think that, as a technogy, the general sentiment is "it's not fully baked yet". When that runs head long into dogmatic refusal to admit to any problems with crypto as a concept or a particular currency, the sparks that fly may look anti-crypto.
  - BrissyCoder 5y ago
    > Fine. However, there's a general anti-crypto stance here largely based on outdated mainstream narratives that if you truly would be literate about crypto, could only laugh at. Can you be specific about the narratives you're seeing on here that you are laughing at?
    - fleddr 5y ago
      Sure. "Crypto is only used by criminals". Complete non-sense, cash is used far more often for illicit activities. In fact, blockchain forensics is developing so fast that crypto increasingly is very unattractive. Not only may they find you, your coins may become "tainted", and rejected by exchanges. "Crypto is a scam". Inaccurate. Out of the 10,000 or so coins, most are scams. Yet there's at least two dozen or so serious long term projects, and these matter, as judged by their market cap. "It's a pyramid scheme or ponzi fraud". No, in particular for the serious projects (Bitcoin, Ether), it does not meet this comparison at all. There is no single beneficiary doing a rug pull. "Crypto boils the oceans". It doesn't. If you see it as an industry, it's greener than most other industries. And particular as we speak, almost all dirty mining (coal-based) is rapidly moving to renewables as miners are leaving China. And not just that, there's a mining council stimulating in particular stranded energy. "It's worth zero". Well, I can't predict market prices, but the point here is that people have no idea about Bitcoin adaption. It grows by millions of users per week, faster than the rise of the internet and Facebook. Also, institutional investors are in, there's ETFs, the first nation accepting it as legal tender, the list goes on. It will face many more obstacles but the point is that this is no longer some weird internet cult, it's mainstream. "Political rejection" Here I'm hinting at mostly liberals rejecting crypto based on political motives. Yet they quite literally fail to see the other side of the coin. Where Bitcoin besides being speculative, also has tremendous humanitarian value. It can help the poor unbanked to store/grow value. It can help people in inflationary regimes protect their property. It allows immigrants to cross borders without seizure. It allows immigrant arrivals to send back money to their homeland, without the middle man taking 35%. And perhaps closer to our first world, crypto may be the young's generation only chance to grow some wealth, as they are locked out of everything else. I know, the above list make me sound like a proponent. I'm not, I'm confused, puzzled. And I embrace that. Because this entire thing is just too complex to slap a single label on.
PragmaticPulp 5y ago
> A relatively unknown, recently launched stablecoin collapsing is not big news in crypto. The fact that some people think a $250,000 heist followed by the collapse of a half a million dollar stablecoin is "not news" underscores how ridiculous the cryptocurrency space is right now.
- mgfist 5y ago
  I don't know much about this space but a half million dollar marketcap is absolutely tiny and non-news. BTC market cap is what, close to a trillion or something?
  - notJim 5y ago
    The top 10 stablecoins together have a total market cap of around $100 billion. Of that, $62 billion is tether, and the next largest is USDC at $26 billion, then BUSD at $10 billion. It is interesting that these exploits still happen.
    - legulere 5y ago
      Those are based on the trust of the companies behind them though and don’t collapse so suddenly. Also MT.GOX took several days to fully collapse.
- __s 5y ago
  VCs blowing an order of magnitude more on coke doesn't make the news
  - salt-thrower 5y ago
    A VC publicly saying "I don't spend money on coke" as a marketing tactic and then getting busted doing just that would make the news. Much like a coin that claims "this coin is stable and its value is tied to USD" getting looted and crashing to $0 also makes the news.
    - 5y ago
deleted 5y ago
[deleted]
puranjay 5y ago
Its the end of the bull run and $250k rugs/exploits are about as common as rainy days in London.
atweiden 5y ago
> Now if dai, usdc or usdt had failed, that would be a big deal. The “Dai” peg did break — both in early 2020 [1], and a few days after launching. DAI’s now 60% backed by Tether like instruments. It’s basically a strictly worse version of Facebook’s Libra, assuming Libra weren’t crippled by state regulators (Libra is now Diem). Every major algorithmic stablecoin has imploded at least once in times of market volatility. Preston Byrne has written a wonderful article explaining why the concept is clearly unsound and theoretically flawed [2]: When you make a “coin” which is in form and substance a repackaged exposure to another underlying cryptocurrency, as Dai is simply repackaged Ether, and Basecoin is simply an abstraction of demand for “Base bonds,” and peg that exposure to some meatspace asset like an ounce of gold or a U.S. dollar, a sudden move against the underlying collateral – in this case, 12% – can trigger a sell-off that breaks that peg, and breaks it hard. It’s perhaps a testament to the frothiness of the cryptocurrency markets — or the sheer number of low information investors — that this concept doesn’t die. No matter how many times the “stablecoin” peg breaks, no matter how many times it costs investors millions of dollars in losses, it just refuses to die. If there were any justice in this world, the concept would’ve been fundamentally discredited years ago. Unfortunately, when stablecoins break, they get propped up by biased investors in closely linked pseudo equities who limp the imploded stablecoin along by injecting more capital and then powering on the hype machine. [1]: https://blog.makerdao.com/the-market-collapse-of-march-12-2020-how-it-impacted-makerdao/ https://blog.makerdao.com/the-market-collapse-of-march-12-20... [2]: https://prestonbyrne.com/2018/01/11/epicaricacy/ https://prestonbyrne.com/2018/01/11/epicaricacy/
- arsmoriendi 5y ago
  For anyone interested in what backs DAI: https://backeddai.makerdao.network/What-backs-my-Dai-9b5ce668bf7e41bab76dcf514934d4b6 https://backeddai.makerdao.network/What-backs-my-Dai-9b5ce66...
jMyles 5y ago
Don't get gaslit - this comment is on-point. (Though I think it's obvious that USDT is a scam.)
ineedasername 5y ago
HN is a social news site subsidized by a company that incubates the latest technologies, including DeFi. If there are any appropriate places on the internet for news about a new collapsed piece of DeFi tech, HN is unquestionably on that list.
deleted 5y ago
[deleted]

rednerrus 5y ago

USDT failed a LONG time ago.

rawtxapp 5y ago
What 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 ago
  The question is are there really $1 USD for every $1USDT? The answer is surely not. You may be able to get your money out today but in the long run there is nearly a 100% chance you lose it all. https://bitfinexed.medium.com/tether-is-setting-a-new-standard-for-transparency-that-is-untethered-from-facts-deec42c473bb https://bitfinexed.medium.com/tether-is-setting-a-new-standa...
  - rawtxapp 5y ago
    There isn't 1$ 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 ago
      The 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.
      - rawtxapp 5y ago
        Which is why I asked what they meant by failure specifically. You have to borrow it to short it, so there's a 1-3% APY cost associated with shorting it. You have to calculate the tradeoff of the likelihood of it going to 0 within the next couple of years vs the cost of borrowing USDT to short it. Say you short 1M$ worth of Tether, it goes belly up within 4 years, it cost you like ~40k$ to short it, but your upside is 1M$. If it never actually fails because the market is irrational or by some miracle Tether was doing the right thing, then your cost depends on when you close your position. It's a relatively cheap way of making lots of money depending on your conviction on Tether's likelihood to fail.
      - Budabellly 5y ago
        I bookmarked this comment from a few months ago on how one might make such a trade: https://news.ycombinator.com/item?id=26174690 https://news.ycombinator.com/item?id=26174690
    - johnnyfived 5y ago
      Nobody that's ripping on tether in here is going to short it lol, they're not that confident in their own words.
slownews45 5y ago
No kidding - each of the these crypto folks go "trust us" - and then even the simplest things (1:1 US Dollar backed coin - seriously - how hard is this!) turn out to be a full of crap and lies. And if you believe USDT has been 1:1 backed by us dollars for its full history - dream on. If you believed they would actually get audited when they said they would - hahah.
- fleddr 5y ago
  Your statement "how hard is this" shows your complete incompetence regarding the backing of anything. Nothing of value is backed in our world. If a mere 7% of bank account holders go to the bank to collect their money, the bank collapses. They don't have your money, it's not there. If all owners of gold (gold value papers) today claim their physical gold, it can't be done. There's 400% more value paper compared to the total supply above ground. If all owners of Apple stock today decide to sell their stock all at the exact same moment, they won't get out the full market cap. Because the entire thing crashed before that. But that won't happen, because the exchange will simply stop the trade. Which is the same thing crypto exchanges do when things get too heated.
  - mike00632 5y ago
    The difference is that Apple doesn't claim to have a 1:1 reserve of dollars to back the value of their stock. It should matter to you that the USDT folks are lying (over something important).
    - fleddr 5y ago
      We're in agreement that lying about backing is wrong in any case, no argument there. I in particular object to the notion that things of value should be 100% backed by actual USD, in bank accounts or cash. That's not how liquidity works, yet a lot of people intuitively believe this to be so.
      - Dylan16807 5y ago
        They said it wasn't hard, not that it was necessary in all circumstances. Banks and gold deposits re-lend money because it makes them money and they can sell the storage service for cheaper. If you want something that won't be loaned back out then you can buy that service pretty easily. And stock prices changing is a very different thing. The actual supply is there, and entire markets caps can and do get sold in things like mergers.

zionic 5y ago

Seriously. Meanwhile on boomer news > A single web server caught fire somewhere in Bolivia, is social media over? (+20000 points)

NationalPark 5y ago

I think it's pretty obvious that people here are very literate about the cryptocurrency space and just find it amusing, apparently to the chagrin of true believers.

fleddr 5y ago
Quite the opposite. It's valid, healthy and even recommended to have significant skepticism regarding crypto. I think that's fair game, as about 90% (or more) of coins are pump-and-dump schemes. Further, almost everything "Defi" is supremely risky, as they are completely unregulated, not insured, often lack liquidity, and can go down the drain at moment's notice. Fine. However, there's a general anti-crypto stance here largely based on outdated mainstream narratives that if you truly would be literate about crypto, could only laugh at. So this community is not "very literate", it doesn't even past the basic smell test.
- ineedasername 5y ago
  I don't think there's a strong anti-crypto stance here. It strikes me much more as a strong anti crypto-fanboy stance. I'm not saying there's no one on HN who doesn't like crypto. I just think that, as a technogy, the general sentiment is "it's not fully baked yet". When that runs head long into dogmatic refusal to admit to any problems with crypto as a concept or a particular currency, the sparks that fly may look anti-crypto.
- BrissyCoder 5y ago
  > Fine. However, there's a general anti-crypto stance here largely based on outdated mainstream narratives that if you truly would be literate about crypto, could only laugh at. Can you be specific about the narratives you're seeing on here that you are laughing at?
  - fleddr 5y ago
    Sure. "Crypto is only used by criminals". Complete non-sense, cash is used far more often for illicit activities. In fact, blockchain forensics is developing so fast that crypto increasingly is very unattractive. Not only may they find you, your coins may become "tainted", and rejected by exchanges. "Crypto is a scam". Inaccurate. Out of the 10,000 or so coins, most are scams. Yet there's at least two dozen or so serious long term projects, and these matter, as judged by their market cap. "It's a pyramid scheme or ponzi fraud". No, in particular for the serious projects (Bitcoin, Ether), it does not meet this comparison at all. There is no single beneficiary doing a rug pull. "Crypto boils the oceans". It doesn't. If you see it as an industry, it's greener than most other industries. And particular as we speak, almost all dirty mining (coal-based) is rapidly moving to renewables as miners are leaving China. And not just that, there's a mining council stimulating in particular stranded energy. "It's worth zero". Well, I can't predict market prices, but the point here is that people have no idea about Bitcoin adaption. It grows by millions of users per week, faster than the rise of the internet and Facebook. Also, institutional investors are in, there's ETFs, the first nation accepting it as legal tender, the list goes on. It will face many more obstacles but the point is that this is no longer some weird internet cult, it's mainstream. "Political rejection" Here I'm hinting at mostly liberals rejecting crypto based on political motives. Yet they quite literally fail to see the other side of the coin. Where Bitcoin besides being speculative, also has tremendous humanitarian value. It can help the poor unbanked to store/grow value. It can help people in inflationary regimes protect their property. It allows immigrants to cross borders without seizure. It allows immigrant arrivals to send back money to their homeland, without the middle man taking 35%. And perhaps closer to our first world, crypto may be the young's generation only chance to grow some wealth, as they are locked out of everything else. I know, the above list make me sound like a proponent. I'm not, I'm confused, puzzled. And I embrace that. Because this entire thing is just too complex to slap a single label on.

PragmaticPulp 5y ago

> A relatively unknown, recently launched stablecoin collapsing is not big news in crypto. The fact that some people think a $250,000 heist followed by the collapse of a half a million dollar stablecoin is "not news" underscores how ridiculous the cryptocurrency space is right now.

mgfist 5y ago
I don't know much about this space but a half million dollar marketcap is absolutely tiny and non-news. BTC market cap is what, close to a trillion or something?
- notJim 5y ago
  The top 10 stablecoins together have a total market cap of around $100 billion. Of that, $62 billion is tether, and the next largest is USDC at $26 billion, then BUSD at $10 billion. It is interesting that these exploits still happen.
  - legulere 5y ago
    Those are based on the trust of the companies behind them though and don’t collapse so suddenly. Also MT.GOX took several days to fully collapse.
__s 5y ago
VCs blowing an order of magnitude more on coke doesn't make the news
- salt-thrower 5y ago
  A VC publicly saying "I don't spend money on coke" as a marketing tactic and then getting busted doing just that would make the news. Much like a coin that claims "this coin is stable and its value is tied to USD" getting looted and crashing to $0 also makes the news.
  - 5y ago

deleted 5y ago

[deleted]

puranjay 5y ago

Its the end of the bull run and $250k rugs/exploits are about as common as rainy days in London.

atweiden 5y ago

> Now if dai, usdc or usdt had failed, that would be a big deal. The “Dai” peg did break — both in early 2020 [1], and a few days after launching. DAI’s now 60% backed by Tether like instruments. It’s basically a strictly worse version of Facebook’s Libra, assuming Libra weren’t crippled by state regulators (Libra is now Diem). Every major algorithmic stablecoin has imploded at least once in times of market volatility. Preston Byrne has written a wonderful article explaining why the concept is clearly unsound and theoretically flawed [2]: When you make a “coin” which is in form and substance a repackaged exposure to another underlying cryptocurrency, as Dai is simply repackaged Ether, and Basecoin is simply an abstraction of demand for “Base bonds,” and peg that exposure to some meatspace asset like an ounce of gold or a U.S. dollar, a sudden move against the underlying collateral – in this case, 12% – can trigger a sell-off that breaks that peg, and breaks it hard. It’s perhaps a testament to the frothiness of the cryptocurrency markets — or the sheer number of low information investors — that this concept doesn’t die. No matter how many times the “stablecoin” peg breaks, no matter how many times it costs investors millions of dollars in losses, it just refuses to die. If there were any justice in this world, the concept would’ve been fundamentally discredited years ago. Unfortunately, when stablecoins break, they get propped up by biased investors in closely linked pseudo equities who limp the imploded stablecoin along by injecting more capital and then powering on the hype machine. [1]: https://blog.makerdao.com/the-market-collapse-of-march-12-2020-how-it-impacted-makerdao/ https://blog.makerdao.com/the-market-collapse-of-march-12-20... [2]: https://prestonbyrne.com/2018/01/11/epicaricacy/ https://prestonbyrne.com/2018/01/11/epicaricacy/

arsmoriendi 5y ago
For anyone interested in what backs DAI: https://backeddai.makerdao.network/What-backs-my-Dai-9b5ce668bf7e41bab76dcf514934d4b6 https://backeddai.makerdao.network/What-backs-my-Dai-9b5ce66...

jMyles 5y ago

Don't get gaslit - this comment is on-point. (Though I think it's obvious that USDT is a scam.)

ineedasername 5y ago

HN is a social news site subsidized by a company that incubates the latest technologies, including DeFi. If there are any appropriate places on the internet for news about a new collapsed piece of DeFi tech, HN is unquestionably on that list.

deleted 5y ago

[deleted]