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There were funds that did due diligence and built out models of the Luna/Terra/Anchor ecosystem and realized it was unstable. You can talk to the people who bu

There were funds that did due diligence and built out models of the Luna/Terra/Anchor ecosystem and realized it was unstable. You can talk to the people who built their models and they have lots of fun things to say about the ordeal.

hcks 4y ago
Do you have any links / references regarding that? I'd like to read more
- photon12 4y ago
  Not that I can share publicly unfortunately.
- josu 4y ago
  We considered putting some of our treasury in Anchor. I didn't build a model, just one hour of DD was enough to see the risks. Here is the message I shared with my team on Slack with the findings from a very brief DD: https://twitter.com/josusanmartin/status/1524323026942242818 https://twitter.com/josusanmartin/status/1524323026942242818
  - grey-area 4y ago
    About 5 seconds thought would be enough to see the risks, and the same goes for the rest of the crypto ecosystem. Even the name of UST is clearly meant to con people who confuse it with USDT. It's scams upon scams all the way down. Even if your figures seem out of date, your argument against UST also holds for USDT (which underpins much of the crypto price bubble): There is 7B USD in circulation and the market cap of US(D)T is 74 BILLION USD All this perceived wealth is going to melt into air soon, and yes a bear market has already arrived.
    - lbriner 4y ago
      You say this, possibly as someone who knows a lot about this stuff but there are plenty of people (including engineers) who don't know enough to refute the bold claims made by the crypto-evangelists and who be convinced that "obviously X is bad, but our product is completely different". I personally have lots of misgivings about various crypto but I really don't have enough expertise to argue against someone telling me that I just don't understand and everything is fine.
      - grey-area 4y ago
        So why is your default position that they are right and this is a new paradigm? Surely the onus is on those promoting such schemes to convincingly explain their workings; if you can get 20% a year the explanation had better be good... This is just the last resort of a scoundrel who knows they can’t explain their scam.
- mellavora 4y ago
  https://www.bloomberg.com/opinion/articles/2022-04-19/the-stability-of-algorithmic-stablecoins?sref=1kJVNqnU https://www.bloomberg.com/opinion/articles/2022-04-19/the-st... > Here is how an algorithmic stablecoin works. You invent two tokens, call them Dollarcoin and Sharecoin. ... The process is sometimes compared to algorithmic central banking, where the central bank maintains the value of the currency (Dollarcoin) by adjusting its supply. > On first principles this is insane.
deleted 4y ago
[deleted]
rsynnott 4y ago
That raises an interesting ethical problem, really; should there be a duty to report this sort of thing, or is "scheme X is fundamentally flawed/a scam and investors will lose everything" legitimate proprietary information? As I understand it, various analysts were pretty sure at the time that Madoff's scheme was a Ponzi, but in general they didn't tell anyone (in fairness, one attempted to and had trouble getting listened to).
- photon12 4y ago
  A model has assumptions, but the space is new enough to where there's going to be uncertainty in any model due to unknown unknowns. So it seems like defining a standard of mandatory reporting of assumptions would be hard.
- lifty 4y ago
  There were many people that reported on the flawed stability mechanism of Terra/Luna/UST. But still, there were many other people that placed their trust in it and cheered the price appreciation.
- dropnerd 4y ago
  for context for others following along, Galois Capital went public with their criticism months before they started shorting. most people didn't listen. https://twitter.com/galois_capital https://twitter.com/galois_capital
  - SilasX 4y ago
    Was there a specific tweet you meant to link? That just goes to Galois’s profile page.
    - dropnerd 4y ago
      its months and months worth of tweets, and that's all they talked about during this year. first a cryptic puzzle as a recruiting tool for analysts: https://twitter.com/Galois_Capital/status/1486937936054689793 https://twitter.com/Galois_Capital/status/148693793605468979... followed by months of warnings like this: https://twitter.com/Galois_Capital/status/1512175439032328198 https://twitter.com/Galois_Capital/status/151217543903232819... and threads pushing the systemic risk angle: https://twitter.com/Galois_Capital/status/1504611166995292165 https://twitter.com/Galois_Capital/status/150461116699529216...

hcks 4y ago

Do you have any links / references regarding that? I'd like to read more

photon12 4y ago
Not that I can share publicly unfortunately.
josu 4y ago
We considered putting some of our treasury in Anchor. I didn't build a model, just one hour of DD was enough to see the risks. Here is the message I shared with my team on Slack with the findings from a very brief DD: https://twitter.com/josusanmartin/status/1524323026942242818 https://twitter.com/josusanmartin/status/1524323026942242818
- grey-area 4y ago
  About 5 seconds thought would be enough to see the risks, and the same goes for the rest of the crypto ecosystem. Even the name of UST is clearly meant to con people who confuse it with USDT. It's scams upon scams all the way down. Even if your figures seem out of date, your argument against UST also holds for USDT (which underpins much of the crypto price bubble): There is 7B USD in circulation and the market cap of US(D)T is 74 BILLION USD All this perceived wealth is going to melt into air soon, and yes a bear market has already arrived.
  - lbriner 4y ago
    You say this, possibly as someone who knows a lot about this stuff but there are plenty of people (including engineers) who don't know enough to refute the bold claims made by the crypto-evangelists and who be convinced that "obviously X is bad, but our product is completely different". I personally have lots of misgivings about various crypto but I really don't have enough expertise to argue against someone telling me that I just don't understand and everything is fine.
    - grey-area 4y ago
      So why is your default position that they are right and this is a new paradigm? Surely the onus is on those promoting such schemes to convincingly explain their workings; if you can get 20% a year the explanation had better be good... This is just the last resort of a scoundrel who knows they can’t explain their scam.
mellavora 4y ago
https://www.bloomberg.com/opinion/articles/2022-04-19/the-stability-of-algorithmic-stablecoins?sref=1kJVNqnU https://www.bloomberg.com/opinion/articles/2022-04-19/the-st... > Here is how an algorithmic stablecoin works. You invent two tokens, call them Dollarcoin and Sharecoin. ... The process is sometimes compared to algorithmic central banking, where the central bank maintains the value of the currency (Dollarcoin) by adjusting its supply. > On first principles this is insane.

deleted 4y ago

[deleted]

rsynnott 4y ago

That raises an interesting ethical problem, really; should there be a duty to report this sort of thing, or is "scheme X is fundamentally flawed/a scam and investors will lose everything" legitimate proprietary information? As I understand it, various analysts were pretty sure at the time that Madoff's scheme was a Ponzi, but in general they didn't tell anyone (in fairness, one attempted to and had trouble getting listened to).

photon12 4y ago
A model has assumptions, but the space is new enough to where there's going to be uncertainty in any model due to unknown unknowns. So it seems like defining a standard of mandatory reporting of assumptions would be hard.
lifty 4y ago
There were many people that reported on the flawed stability mechanism of Terra/Luna/UST. But still, there were many other people that placed their trust in it and cheered the price appreciation.
dropnerd 4y ago
for context for others following along, Galois Capital went public with their criticism months before they started shorting. most people didn't listen. https://twitter.com/galois_capital https://twitter.com/galois_capital
- SilasX 4y ago
  Was there a specific tweet you meant to link? That just goes to Galois’s profile page.
  - dropnerd 4y ago
    its months and months worth of tweets, and that's all they talked about during this year. first a cryptic puzzle as a recruiting tool for analysts: https://twitter.com/Galois_Capital/status/1486937936054689793 https://twitter.com/Galois_Capital/status/148693793605468979... followed by months of warnings like this: https://twitter.com/Galois_Capital/status/1512175439032328198 https://twitter.com/Galois_Capital/status/151217543903232819... and threads pushing the systemic risk angle: https://twitter.com/Galois_Capital/status/1504611166995292165 https://twitter.com/Galois_Capital/status/150461116699529216...