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This seems like it was more or less just a straight-up scam. They told customers that they were investing their funds in a diversified set of stablecoins. They
by alex504 4y ago
This seems like it was more or less just a straight-up scam. They told customers that they were investing their funds in a diversified set of stablecoins. They promised the customers they could not lose money because the stablecoins were all backed. They then put all of the money into Terra, an algorithmic stablecoin, which is not backed by anything.
Terra gave yields near 20%, but Stablegains gave 15%, so they were basically just skimming 5% off the top. I wonder if it will be possible to sue or even prosecute.
- j_walter 4y ago> which is not backed by anything. I mean it's backed by an algorithm...but that's obviously worthless
- adastra22 4y agoWords like “backing” have specific meaning in the world of financial regulations. This use is wildly different from that meaning.
- SilasX 4y agoDoesn't stop the legions of commenters who will join discussions like these to proudly assert that the US dollar is "backed by" the US economy, the US military, etc.
- aliswe 4y agoWhat kind of algorithm is that anyway? return 1; ?
- Jasper_ 4y agoYou can't simultaneously be stable while also gaining in value. Remember the golden rule of trading: in order for someone to sell an asset for a price, someone else must want to buy that asset for that same price. Luna continually going up must destabilize Terra. The trick is that you moved all the instability to one side of the equation, trying to pretend it's not there. It's a scam on its very face because it's promising a stable, perpetual motion machine.