35 ms·

Solend seized $170M of user funds

283 points by 55555 4y ago

mirntyfirty 4y ago
I thought the whole point of crypto was to help the unbanked, save us from the evils of fiat, provide anonymous decentralized transparency that protected users, and serve as a hedge against inflation or market turmoil. /s
PragmaticPulp 4y ago
One of the themes in pro-crypto writings has been the idea that as long as you “do your own research” then the bad things won’t happen on your chosen cryptocurrency. The prevailing idea (among pro-crypto spaces) is that bad things only happen to other people who deserve them because they didn’t do the right research. Recently we’re seeing the bad things happen in more and more mainstream chains. Even famous NFT proponents have been losing their NFTs to scams at a shocking rate. I wonder if this will drive people back to simpler chains like Bitcoin, or if we’re going to see enough bad things (including crashes) that it just sucks the enthusiasm out of the crypto space entirely.
- diob 4y ago
  This is a common life viewpoint in general. Bad things happen to other people because they did something to deserve it. Good things happen to them because of luck. Good things happen to me because I deserve it. Bad things happen to me because of bad luck.
  - cowtools 4y ago
    We're not talking about people getting struck by lightning here, we're talking about an intentionally built and voluntarily used computer system. If you don't understand the risk, don't invest.
    - diob 4y ago
- usrn 4y ago
  These are tokens not crypto currencies. Please stop confusing them.
- tatertots1234 4y ago
  Most of the things that cause these problems, like stolen apes, would not work on Bitcoin as it lacks smart contract functionality.
  - cowtools 4y ago
    Bitcoin has some scripting[0] functionality, and its non-fungibility[1][2] can facilitate NFT-like colored coins[3][4] [0] https://en.bitcoin.it/wiki/Script https://en.bitcoin.it/wiki/Script [1] https://en.bitcoin.it/wiki/Fungibility https://en.bitcoin.it/wiki/Fungibility [2] https://sethforprivacy.com/posts/fungibility-graveyard/ https://sethforprivacy.com/posts/fungibility-graveyard/ [3] https://en.wikipedia.org/wiki/Colored_Coins https://en.wikipedia.org/wiki/Colored_Coins [4] https://www.youtube.com/watch?v=889JSfIaPzs https://www.youtube.com/watch?v=889JSfIaPzs
    - AdrianEGraphene 4y ago
      Colored coins is one of my #1 favorite topics! The same issue (high fees) that plagued ETH would soon arise if doing "Colored Coins" for NFTs on BTC. Regardless, this could certainly be done. Colored coins was actually one of the 1st concepts that seriously drew my interest to this space. One might think Lightning Network would be a good solution, but LN is fungible, so that wouldn't work. Still, colored coins is an awesome concept and I'm planning to help with at least 1 use-case (fingers crossed!) in the next few months.
    - tatertots1234 4y ago
      Theoretically possible but practically impossible, and one of the reasons that NFTs and DeFi will probably never be adopted on Bitcoin L1 unless the protocol changes.
- 3a2d29 4y ago
  Not to be super “arm chair psychologist” about this, but I always thought the whole “you deserve it if you got scammed” mentality comes from the people that believe crypto will replace all modern finance. For crypto to replace modern finance, it needs to be better in every way (so it’s a total replacement). Decentralized currency is better for some things, worse for things like preventing scams. If modern finance prevents scams better, than crypto won’t replace it in that area at least. Solution? Easy: scams aren’t a problem. Modern finance isn’t better in fixing that problem, cause it’s not a problem. Now crypto is once again better in every way.
  - douglaswlance 4y ago
    >it needs to be better in every way It only needs to be better in enough ways to persuade enough people to adopt it such that it hits a tipping point and becomes the de facto standard.
    - iJohnDoe 4y ago
      No, it needs to be better in every way. If it’s not, then what’s the fucking point? Popularity and a better replacement are two different things.
      - jacobedawson 4y ago
        Here's a new type of computer - it's exactly the same as your current computer, except it consumes 1/10th of the power... A replacement doesn't have to be better in every single facet.
        charcircuit 4y ago
        Do you mean 10x the power?
        filoleg 4y ago
        Unless you value inefficiency and spending a lot of money on electricity, the answer is "no", the parent comment actually meant 1/10th power.
- granddemolisher 4y ago
  I find it as absurd as anyone else. The field is unfortunately rifled with people who are shills and religious believers. I have talked to a few VCs and technical people drilling down into the tech - I had better arguments than them for why someone would use the projects they funded or created.
  - jasonwatkinspdx 4y ago
    Just last night the owner of the neighborhood convenience store was asking me to explain NFTs, as one of his other regulars was hyping them up earlier that day. This man has run his business for decades, understands commercial banking services, etc. I could not for the life of me fully convince them that with NFT's, "there's no there there." Like these things have been so hyped by so many people close enough to the main stream that the fomo style "those rich guys have to be onto something smart with this" assumption is incredibly hard to disprove. The closest I got was using beanie babies as an example.
    - ethbr0 4y ago
      I lead with "Amateurs calculate gains; professionals calculate risk."
- TrackerFF 4y ago
  DYOR = watching 10 min vids from influencers pumping up shitcoins, hanging around in various discord or telegram echo chambers, skimming through whitepapers you don't understand.
- agumonkey 4y ago
  Research is fuzzy word in this bubble. I've seen people crafting their own tiny metric: twitter liveness, github activity, size of source code, website quality. White paper reading (I skimmed through a few, it felt like marketing speach most of the time). It only feels solid for newbs who never designed a system or seen math above HS level.
- rglover 4y ago
  They say "do your own research" and then when you do and have questions about difficult to conceive (or seemingly irrational things) they belittle you, attack you, and—at least on Twitter—reply with snarky memes. As soon as I started investigating Ethereum, ERC-20 tokens, etc. at a technical level, I realized it was a house of cards of immense proportions. The place that didn't happen? Bitcoin. There's not a lot of esotericism around Bitcoin (skim 1-2 books, listen to a couple of talks on YouTube, and generally speaking you "get it"). If you're genuinely interested, people are more than happy to help you and set you on the right path.
  - acover 4y ago
    What's wrong with erc20 tokens?
    - cypress66 4y ago
      Not him, but in my opinion upgradeable contracts (not all erc20 use them of course)
- Spartan22 4y ago
  That's a straw man. Doing your own research doesn't guarantee protection against all scams or losses, it just increases it and scams and freezes are to be expected, that's why diversification and taking profits is key. Very flawed argument.
- yieldcrv 4y ago
  That's not the impression I get about this one action being discussed, but odd take. There are a variety of amateurish and hysterical things about this Solend project. Why don't you just talk about that project? Like, how the liquidation won't be that bad? Or how half a million dollars in Solend tokens gets to vote to seize $170m of funds? those things are hilarious.
- SergeAx 4y ago
  NFT is just an URL pointing to CDN (or even S3) stored on the ledger, how one can "lose" it?
- wyager 4y ago
  Basically anyone I consider especially credible has been consistently saying "everything except bitcoin is overwhelmingly likely to be a scam", which has proven to be a fairly reliable heuristic. I think anyone who actually "DTOR" and has the brain power to interpret the results comes to a similar conclusion.
- saurik 4y ago
  Solend is just some random lending market that I--despite being in this space full time--don't think I've ever heard of... supposedly it is similar to AAVE, but on Solana? Just because something happens "in more and more mainstream chains" is meaningless: the chain on which something is running is unrelated to whether it is a good idea or not. I want to be very clear about this: I highly doubt that any normal person CAN do enough research to safely manage loans or borrow and invest with leverage, which is what these lending platforms are for, but that doesn't mean that they are fundamentally broken or are scamming people.
- physicsguy 4y ago
  Like with normal investing, consumers do not have the ability to “do their own research” about the internals of companies who create and promote cryptocurrencies. Which means that the research is flawed.
  - cormacrelf 4y ago
    This one was about the concentration of voting power. It turned out that a single, anonymous owner of governance tokens had enough votes to decide this hugely consequential issue on their own. Almost as if corporate shareholding concentration and acquisition-disclosure laws are as good as it gets for "decentralisation" of decision-making, and crypto is now going to have to reinvent that as well. Like, there are literally already laws in many jurisdictions that prevent multiple apparently-independent parties conspiring to avoid jumping over ownership thresholds but nevertheless acquire a majority of a company. Have fun emulating that with pseudonymity, no central regulator and no law enforcement with jurisdiction everywhere the participants are!
jakelazaroff 4y ago
If you want a non-Reddit summary: https://web3isgoinggreat.com/?id=solend-dao-passes-proposal-to-take-over-the-account-of-a-large-holder-with-a-position-that-poses-systemic-risk https://web3isgoinggreat.com/?id=solend-dao-passes-proposal-...
- moralestapia 4y ago
  "The proposal elicited strongly negative reactions from many in the crypto community, who feel that a project taking over a user's account flies in the face of the concept of defi and sets a dangerous precedent." LOL
- DantesKite 4y ago
  Thank you. Following all these events has been difficult and having a place that provides context for each of these events is so useful.
55555 4y ago
There is some more analysis/coverage here: https://twitter.com/FatManTerra https://twitter.com/FatManTerra > The Solend team just confirmed to me that when this change is implemented, the whale will instantly be partially liquidated down to a safer ratio. SOL is $32 but his current liquidation price is only $22. On the fence about the main proposal, but I do not agree with this part. This is messed up.
Kiro 4y ago
Readable link on mobile: https://www.reddit.com/r/CryptoCurrency/comments/vfszpt/solend_the_largest_lending_market_on_solana_is/ https://www.reddit.com/r/CryptoCurrency/comments/vfszpt/sole...
- mminer237 4y ago
  New reddit's even worse. Here's the better mobile version: https://i.reddit.com/r/CryptoCurrency/comments/vfszpt/solend_the_largest_lending_market_on_solana_is/ https://i.reddit.com/r/CryptoCurrency/comments/vfszpt/solend...
baq 4y ago
defi at its best. zero upside of centralized finance with all the downsides, after all.
- Melting_Harps 4y ago
  > defi at its best. zero upside of centralized finance with all the downsides, after all. DeFi definitely over promised, and under delivered: the part that I take issue with is why build these tools on centralized alt currencies? I mean if you think NFTs are the extent of DeFi (much of which is what web3 hinged on) than this was predictably going to fail just like the ICO craze did. Smart contracts based on oracles are likely to be the real big advent, and I foresee it to be what Dorsey is proposing with now the absurd titled 'web5.' I just can't see why anyone would place this much trust in a PoS coin with a central governance and with major stake by VC in SV. The whole point was to get away from these gate-keepers, not allow them to have a major share of the coins in existence where they can, likely have, cornered the entire market. Whatever, a purging was necessary: I hope this makes CONbase fold once and for all. I just wish I had kept my cash and been able to take advantage of this major dip in BTC: I made major purchases back when we hit mid 30s (~50% of ATH) after liquidating some positions in late Nov.
  - scrlk 4y ago
    >I just can't see why anyone would place this much trust in a PoS coin with a central governance and with major stake by VC in SV. In a bullrun, no one cares about "decentralisation" or "fundamentals", they just want to make as much money as possible, even if it means interacting with CEXs/CeFi/centralised L1 scamchains etc. Only when things go south do people understand why "decentralisation" is important.
    - Melting_Harps 4y ago
      > Only when things go south do people understand why "decentralisation" is important. So the greater fool theory isn't a feature of the platform as it's often portrayed as by it's detractors, but rather a self-imposed one by the new cohorts? I guess that while the tech matures the fomo aspect never seems to go away regardless of time. > because the decentralized cryptocurrencies are expensive to transact with — because many people, like you, strongly prefer to use the decentralized ones and so pay a premium to do so. It's currently .20 to do a 10 min tx on BTC layer 1, and near free and instant on layer 2. How is this expensive?
flaque 4y ago
The current headline "Solana just seized $170MM of user funds to prevent a decrease in Solana's price" is factually incorrect. A project on Solana, called "Solend", froze $170m of funds deposited into its protocol. "Solana" didn't seize the funds, nor was the purpose specifically to protect Solana's price.
- 55555 4y ago
  Sorry, I misattributed this in a big way. > nor was the purpose specifically to protect Solana's price. I think it was. What else would the purpose be? Note that I think the true purpose of "preventing Solana network downtime" would be to protect the price. They're trying to avoid cascading liquidations down to zero, because everyone involved in the governance is holding substantial amounts of Solana. I think letting the liquidations happen on-chain, and even cascade, is much more in the spirit of crypto. But an argument could be made, just like with what happened in the LME Nickel market, if you think that letting people wrestle for control of the chain is true decentralization, or if you think that the true goal of a market provider is to provide stability above all else... Forcibly "partially liquidating the position" above liquidation price is pretty indefensible. Are they going to point to a line in their TOS that says that at the end of the day they always have the right to do whatever they want?
  - tylersmith 4y ago
    This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted.
    - laweijfmvo 4y ago
      > This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted. I'm trying to understand this, but it's beyond me. Can someone ELI5? Here's what I get: Someone borrowed $108M (in USDC and USDT) and put up 5.7M SOL ($170M USD) as collateral, with the terms that if SOL should fall the lender can liquidate the SOL to recoup their loss; in this case, if SOL reaches $22.30, they can recoup ~$20M USD. This all sounds like a perfectly normal lending process. SOL is (was) currently at $32, but the claim is that the borrower seems to have no interest in taking any action and allowing the liquidation to occur. Question: who's making this claim and on what basis? The next claim is that this liquidation, if it were allowed to occur, would cause the price of SOL to fall even further, which also makes sense. The market cap of Solana seems to be ~11.5B (billion with a B); $20M shouldn't be the end of the world? 24hr volume is ~$2B, so this would be 1%. Question: why is allowing this liquidation the end of the world? Last question: what does any of this have to do with Solend? Are they the ones that lent the $108M out, or are they just the middle man? If the former, is the concern that they won't be able to recoup their losses under the terms of the contract and falling price of SOL?
55555 4y ago
Sorry, I've read this again and now I think this has little to do with Solana and entirely to do with Solend, and I think they're separate. Maybe someone who knows more about the space can clarify things. I now presume the funds needed to be deposited in Solend's smart contract in order for the trader to borrow the funds against his collateral, and Solend is pushing a patch in order to modify the code so they can seize the funds that are held within their own smart contract. So the Solana team may be totally innocent. But it's still news, because Solend doesn't look much like a "decentralized" lending platform where no one can seize your funds if they can seize your funds and modify the loan and partially raise the liquidation price, and I assume this is the biggest market on Solana. It's quite reminiscent of the ETH split / DAO hack.
- jacquesm 4y ago
  You could simply delete your post.
  - 55555 4y ago
    I thought there was a 10 minute rule. But actually I can still edit the headline and have. It's pretty big news imo.
    - junofan 4y ago
      You might want to remove the editorializing in your title as well.
      - nrmitchi 4y ago
        The "headline" of the reddit post OP linked to is way to long to be a HN title. The headline on HN has already been updated to "Solend just seized...", rather than "Solana just seized..."
      - heartbeats 4y ago
        This is a correct description, though. From the quote in the article (emphasis added): > [A large liquidation] could cause chaos, putting a strain on the Solana network. Liquidators would be especially active and spamming the liquidate function, which has been known to be a factor causing Solana to go down in the past. > Letting a liquidation of this size to happen on-chain is extremely risky. DEX liquidity isn’t deep enough to handle a sale of this size and could cause cascading effects. Additionally, liquidators will be incentivized to spam the network in an effort to win very lucrative liquidations. This has been known to cause load issues for Solana in the past which would exacerbate the problems at hand. So, according to Solend, there are two issues at stake here: 1. The network might have technical problems processing the amount of transactions. 2. DEX liquidity isn’t deep enough to handle a sale of this size and could cause cascading effects What they mean by this second point is that, should a sale happen, then: 1. not enough people will stand willing to buy at a favorable price ("liquidity isn't deep enough") 2. this price crash could cause others to get liquidated in turn ("cascading effects") This is a statement about the impacts on prices, so IMO it's not editorialized.
ChuckMcM 4y ago
And @patio11's take : https://twitter.com/patio11/status/1538601104098852865 https://twitter.com/patio11/status/1538601104098852865 which is illuminating as well. The whole "crypto is speed running through the finance playbook" theme is fascinating to me.
- melony 4y ago
  So what is the downside of crypto? All the furor seems to be about how the whale's funds were seized. But there is no evidence to the contrary that this won't happen in day to day Wall Street banking. From patio11's > When we say “crypto is speedrunning learning what finance already knows” sometimes it is about attacks but sometimes it is about quotidian topics like “Can you adversarially blow your clients out of trades which you think imperil your firm or other clients?” Answer in traditional finance by the way: yes you absolutely can. Your lawyers have long since thought of that and put that language in your contracts, making it very explicit that if you trigger it you don’t need a vote on Discord to do so. There is nothing that proves that traditional finance is any better than crypto. Though I do not recall the British government arresting Soros when he broke the pound.
  - threeseed 4y ago
    > So what is the downside of crypto? * Ordinary people being financially ruined along the journey. * Environment being harmed by pointless mining. * Investment money being wasted on companies that are simply cloning TradFi.
  - SgtBastard 4y ago
    >So what’s the downside of crypto? Ecologic vandalism, for one.
  - timeon 4y ago
    You are right, crypto is pointless then.
- laweijfmvo 4y ago
  Thanks, this Twitter thread explained it all in plain English. Edit: Last question: > On the one hand here, we have one (rich) guy. Perhaps he is sophisticated, perhaps not, perhaps he believes code is law, perhaps not. > He used a computer program to borrow $100M. > The people who wrote that computer program are now terrified of it. So does Rich Guy get to keep the $100M in stable coin regardless of what happens to the SOL he put up?
nrmitchi 4y ago
> The proposal succeeded hours after it was proposed, with one whale providing 1 million votes out of the 1.15 million votes in favor. Decentralized my ass
- mjburgess 4y ago
  Just like land under feudalism -- the land was /everywhere/ !
  - octoberfranklin 4y ago
    ... but the ownership was not.
    - mjburgess 4y ago
      Indeed, crypto is fedualism by-design. Libertarianism with land as property is feudalism.
      - octoberfranklin 4y ago
        ... which is why Land Value Tax should be the primary mechanism for funding the government. There really is no private land ownership in the USA. Stop paying your property tax and you'll find out who your landlord is. Raising and lowering that rent payment is the tool for balancing homeownership against what you describe as feudalism.
- ATsch 4y ago
  Hey, at least we have a good example of what "voting with your wallet" actually looks like if brought to it's logical conclusion.
  - jancsika 4y ago
    In all fairness to crypto aficionados, it's not "voting with your wallet." It's more about using whatever is in your wallet to gain control over the financial... Oh shit, someone stole my apes. Can someone PM me to help me recover my apes? I can't vote without them!
wronglebowski 4y ago
How did the "whale" have so much invested in the market but such little voting rights?
- qabqabaca 4y ago
  The whale has been inactive and almost certainly didn't vote on this proposal. The Solend team tried to reach out to them via socials multiple times and they never responded. You can see their attempts in the "What We've Tried" section here[1] [1] https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxPMnXJUZ1Hn/proposal/HuaL6cDtuNtfnJgvwMnYiZDHVCoLAuDtVFgJD8kYChJ4 https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxP...
  - 55555 4y ago
    > has 170MM staked and isn't picking up the phone Three Arrows Capital?
- renewiltord 4y ago
  They don't have voting rights because they don't have SOL. They don't have SOL because they put it in there to get USDC+USDT. If they don't believe in the depth of the SOL/USD(C|T) books this could just be a way to sell SOL or go short SOL. This whale is probably just happy to default on the loan and get liquidated at this point.
  - granddemolisher 4y ago
    > This whale is probably just happy to default on the loan and get liquidated at this point. Understandable but absurd given the systematic risk.
  - wronglebowski 4y ago
    Are they in the red on the loan? The numbers and functions are where I get confused. "a whale has deposited 5.7M SOL ($170M and borrowed 108M USDC and USDT borrowed)" So they put in 5.7 SOL at some price, and used it to borrow stablecoins? If their position is liquidated how does that play out? If he traded coin for coin how do they get the traded assets back?
qabqabaca 4y ago
This needs a title change. The main effect this would have on the Solana network would be congestion due to so many liquidators trying to claim the collateral. It is not related to the price. >Additionally, liquidators will be incentivized to spam the network in an effort to win very lucrative liquidations. This has been known to cause load issues for Solana in the past which would exacerbate the problems at hand.
renewiltord 4y ago
Account gov'd. All my SOLs gone.
tatertots1234 4y ago
Misleading title. This is Solend, not Solana.[1] Not that this would be entirely surprising by Solana itself, which is a centralized chain that has been struggling to handle its network uptime and throughput in recent months. [1] https://mobile.twitter.com/solendprotocol/status/1538441350441422848 https://mobile.twitter.com/solendprotocol/status/15384413504...
Zaskoda 4y ago
I've been working on a game for Ethereum for a while. In recent times, "I" has become "we" and we're getting a fair bit more serious about it. In the last year, we watched a bunch of local startups with relatively weak game concepts get heavily funded to build with Solana. It made me sad and, admittedly, a bit jealous at the time. In retrospect, I couldn't be more happy that we're still building for the Ethereum virtual machine. It turns out that pumping tons of money into a developer community for a half-baked platform isn't the best approach.
- ShamelessC 4y ago
  You're building ones of those games people get paid to play and you're... proud of this work? As someone who has watched gaming become ruined by micro transactions and loot boxes, that's challenging for me to wrap my head around. Sorry if that seems rude but I literally can't imagine a sketchier idea than that. If you have game dev skills, please please, just make an actual fun video game that you purchase and own for life. You know, something valuable enough that you don't have to pay people to play.
  - Zaskoda 4y ago
    No, I'm building a game that runs entirely on EVM. I love the notion that players pay per transaction and that money goes to people who run nodes that support the network. We are not designing any intentional "play to earn" mechanics. But thanks for assuming.
    - UncleEntity 4y ago
      You pay per chess move (or whatever) and the money exits the game economy so the winners (and coders) get nothing but a pat on the back? I don’t really play games but I guess that sounds fun.
- zomglings 4y ago
  What’s the game? My team has been playing a lot of conquest.eth recently and we’re ramping up on darkforest, too, now. Would love to check it out of there’s anything available for us to try.
moralestapia 4y ago
LOL, all of these "decentralized" currencies turned out to be quite centralized in practice. I like crypto, but it is true that it brings nothing new to the table.
throwoutway 4y ago
A smart contract can be upgraded to take over a whale’s account? How is that a thing? I remember the whole “code is law” on the chain, rather than trusting escrow/third party/judges >Grant emergency power to Solend Labs to temporarily take over the whale’s account so the liquidation can be executed OTC and avoid pushing Solana to its limits. This would be done via a smart contract upgrade. Emergency powers will be revoked once the whale’s account reaches a safe level
- itake 4y ago
  Contracts can be written as dumb proxies that allow people to 'update' their code (to correct for bugs or add new features). I believe at a high level, the creators have a 'proxy' contract that only they can set a variable that points to new versions of the primary contract.
- gruez 4y ago
  >I remember the whole “code is law” on the chain, rather than trusting escrow/third party/judges Yeah, but in this case the code is law, it's just that the code in question also says that it can be modified by a majority vote.
rvz 4y ago
Solend. Not Solana. Nice try though. Time to put the pitch forks down and is no different to the DAO hack for Ethereum. Next time, just read beyond the headline, titles rather than quickly spreading outrage everywhere in the comments section. It really doesn't help. Especially if the source is... ...Reddit.
- mscarborough 4y ago
  > and is no different to the DAO hack for Ethereum. yikes! the system has had material downtime 7 times in the last year. how is that OK?
  - rvz 4y ago
    > how is that OK? And who said it was OK? Because I didn't. The whole point is in the Solend case and the reversal of the entire Ethereum chain to restore the funds due to DAO hack tells us that not only 'decentralization' is a complete massive lie, but it also shows the nonsense about 'cOdE iS lAW', and it will only get worse with proof-of-stake. We have been way past the lies of the 'decentralization' narrative since 2016.
foepys 4y ago
This is a fight between whales, nothing more. If the average "retail" coin holder thinks they have any influence, they are dead wrong. This is the cryptocurrency reality where the small man is overpowered by the bourgeoisie who own so much more capital that they only need to fear each other.
- tharne 4y ago
  > This is the cryptocurrency reality where the small man is overpowered by the bourgeoisie who own so much more capital that they only need to fear each other. How is this any different than the traditional financial system? Remember 2008, where bankers were reckless and the government bailed them out, while regular people who were reckless got f--ked?
- threeseed 4y ago
  > This is a fight between whales, nothing more It clearly shows you that even in crypto the rich and powerful can manipulate the rules.
  - senectus1 4y ago
    Whales are the vast majority of why crypto is broken. too few hold too much. the evidence is blatantly obvious they have been messing with the markets for their own purposes. because they hold so much of it, it makes for a very fickle and fragile market.
- tootie 4y ago
  Isn't this kinda the same as the equity stakes that owners of public shares can exercise? Except opaque and unregulated?
deleted 4y ago
[deleted]
sva_ 4y ago
Maybe Solend is short for Solana-end
rossdavidh 4y ago
Crypto has been an interesting experiment in rediscovering the reasons for all the financial regulations which we developed for regular currency in the late 19th and early 20th century.
RichardHeart 4y ago
Not your keys not your coins. Not your admin keys, not your coins.
- cuteboy19 4y ago
  Admin keys?
  - yieldcrv 4y ago
    A lot of "decentralized finance" projects have a way for a centralized entity to control them. Often times an individual. And other times a multisignature address controlled by two of the same individual's addresses. Users should be more discerning but are not.
    - EGreg 4y ago
      Is the OA of Hex a centralized entity?
    - vkou 4y ago
      You can't, and don't have time to be discerning if you want to 'get rich quick' during a bull market in an ecosystem that produces nothing of value.
      - yieldcrv 4y ago
        Although there are several things I disagree with in that statement, I can understand why people believe that and participate the way they do: All the extremely high alpha opportunities I’ve had were because the opportunities presented themselves in the protocols that I knew and understood. It was all luck that “my” protocols were the ones that became wildly mispriced or had a flaw or attracted vast interest. And it is distressing seeing all these different protocols have these wild returns or opportunities that I was only able to be aware of in hindsight. But I don't chase. My strategy has been to wait. I do this in many markets and asset classes. Wait for the perfect storm that fits my criteria. It doesn’t matter to me that other people can’t understand it because the trading or valuation book with survivorship bias on its side hasn’t come out or been revealed yet. Since it hasn’t had time to. By the time the equivalent of 1980s technical analysis books come out for this market that some future children will swear by, it will just be a different market. For DeFi sector, I also wait and act fast. I saw a protocol (that I was already familiar with) get hacked and people sold off the tokens. Initially seeing the price drop so hard, I went to twitter to see that there was a hack. Then I went to discord to see what people were thinking. Then in parallel I went to the blockchain as soon as I found the transactions. The information asymmetry immediately presented itself to me. People were afraid of many things happening that could not happen. Like they were primarily afraid that the hacker had a bunch of the project’s token and would sell it - crashing the price before the other users did. Secondarily, they were afraid that the project’s technology was irreparably flawed. And thirdly, the lowest weight, they were afraid that the reputation would be hit. For one and two they were simply wrong. So I bought the dip. For three, well because users aren’t discerning lol… there just isn’t a history to really support that when the supply stays the same, and there are so many for projects can do to appease their audience, so it fit my risk profile and the token recovered to pre-dip prices in a week and I ultimately made 6,000% on it. For the users of the actual product, the ones that took out insurance policies elsewhere were immediately recompensated. There should be news articles about that, but again I’m pretty fine with the information asymmetry where there is a belief that everything goes wrong. People don’t know how to do what I did, but what I did is a very low bar. Its not genius, it is reading some code and blockchain analysis, and the luck/risk is heavily reduced. Confirm with the blockchain and know how that protocol works. Or don’t participate. The people I compete against do that, and the people I compete against in other markets are also highly optimized for those markets, so who cares if “reading code” sounds like an absurdity to today’s wannabe crypto traders. Another thing I do is scan the blockchain for previously unique method signatures. This means someone is launching a clone. It doesn't matter to me that other people don't scan like that or at all, I know that I'm competing with some people that also do this. If you don't know what you're buying, get out of the market. Or be my exit liquidity.
soared 4y ago
Is there a good article. Pearly explaining the potential issue here? I don’t really know anything on chain liquidation, liquidators, etc.
edf13 4y ago
Just to clarify - this is Solana, which is and always has been big vc funded and controlled. It has always been semi-centralised… but has big funds for pr. It isn’t bitcoin or even Eth… it isn’t decentralised
- ShamelessC 4y ago
  Right, but neither are ETH and BTC for 99.999% of the population that can't read smart contracts or manage their own wallet.
  - itsmeacupoftea 4y ago
    Bold of you to think even 80,000 odd people can competently read smart contracts and manage their own wallet.
leodriesch 4y ago
Solana boasts about being scalable and capable of processing more than 1000 transactions per second, how is it that this is threatening the performance of the network?
- encryptluks2 4y ago
  Solana is constantly down and having transaction fail due to low TPS. I don't think they could lower the performance anymore than it is.
- ShamelessC 4y ago
  Is this rhetorical? Because it seems naive to assume would honest about any of that.
NelsonMinar 4y ago
I'm sure this seizure of funds will soon be resolved with an orderly resolution process following applicable banking regulations.
- yieldcrv 4y ago
  Yeah as soon as they went custodial they opened all of traditional finance’s banking regulations on themselves. This is a good reason to call the regulator on them and any OTC desk they actually used.
nativeit 4y ago
If the "whale" happens to be an individual or organization that just needed to launder a shitload of illicit funds and found a handy loophole, then of course they didn't show up to vote--they already got their USD, why bother?
Flatcircle 4y ago
In my humble opinion, so far, the only realistic use of crypto is as a store for digital art. Which is also a form of speculation actually, but at least you can enjoy the tokens as art. If that's the case, then 99 percent of all the chains will fall away and leave just two. ETH and Tezos. presumably new tech will be discovered and new chains will be able to handle that. But as of now, the digitization of art actually works very well in crypto, in the form of NFTs (which is a polarizing word) Solana is a VC back speculative chain which is trying to kickstart art and PFPs on it, because that's basically the only thing you can do right now with where the tech is at. But all the real artists have already made their home on ETH and Tez.
- anonymousab 4y ago
  > In my humble opinion, so far, the only realistic use of crypto is as a store for digital art Like, IPFS? Does that system count as crypto? I'm not aware of any crypto system that both stores the art itself on chain and can successfully scale and be useful to a global audience (or at least Bitcoin or ethereum levels of use) without significant costs, slowdowns or sacrifices.
  - Flatcircle 4y ago
    Both IPFS and onchain. Most of AB stuff is onchain, as is CryptoPunks, most stuff on tezos is hosted elsewhere, and there's a great service that popped up that stores your art in case the chain or service folds. That's the type of new useful business in the space.

283 points by 55555 4y ago

I thought the whole point of crypto was to help the unbanked, save us from the evils of fiat, provide anonymous decentralized transparency that protected users, and serve as a hedge against inflation or market turmoil. /s

PragmaticPulp 4y ago

One of the themes in pro-crypto writings has been the idea that as long as you “do your own research” then the bad things won’t happen on your chosen cryptocurrency. The prevailing idea (among pro-crypto spaces) is that bad things only happen to other people who deserve them because they didn’t do the right research. Recently we’re seeing the bad things happen in more and more mainstream chains. Even famous NFT proponents have been losing their NFTs to scams at a shocking rate. I wonder if this will drive people back to simpler chains like Bitcoin, or if we’re going to see enough bad things (including crashes) that it just sucks the enthusiasm out of the crypto space entirely.

diob 4y ago
This is a common life viewpoint in general. Bad things happen to other people because they did something to deserve it. Good things happen to them because of luck. Good things happen to me because I deserve it. Bad things happen to me because of bad luck.
- cowtools 4y ago
  We're not talking about people getting struck by lightning here, we're talking about an intentionally built and voluntarily used computer system. If you don't understand the risk, don't invest.
  - diob 4y ago
usrn 4y ago
These are tokens not crypto currencies. Please stop confusing them.
tatertots1234 4y ago
Most of the things that cause these problems, like stolen apes, would not work on Bitcoin as it lacks smart contract functionality.
- cowtools 4y ago
  Bitcoin has some scripting[0] functionality, and its non-fungibility[1][2] can facilitate NFT-like colored coins[3][4] [0] https://en.bitcoin.it/wiki/Script https://en.bitcoin.it/wiki/Script [1] https://en.bitcoin.it/wiki/Fungibility https://en.bitcoin.it/wiki/Fungibility [2] https://sethforprivacy.com/posts/fungibility-graveyard/ https://sethforprivacy.com/posts/fungibility-graveyard/ [3] https://en.wikipedia.org/wiki/Colored_Coins https://en.wikipedia.org/wiki/Colored_Coins [4] https://www.youtube.com/watch?v=889JSfIaPzs https://www.youtube.com/watch?v=889JSfIaPzs
  - AdrianEGraphene 4y ago
    Colored coins is one of my #1 favorite topics! The same issue (high fees) that plagued ETH would soon arise if doing "Colored Coins" for NFTs on BTC. Regardless, this could certainly be done. Colored coins was actually one of the 1st concepts that seriously drew my interest to this space. One might think Lightning Network would be a good solution, but LN is fungible, so that wouldn't work. Still, colored coins is an awesome concept and I'm planning to help with at least 1 use-case (fingers crossed!) in the next few months.
  - tatertots1234 4y ago
    Theoretically possible but practically impossible, and one of the reasons that NFTs and DeFi will probably never be adopted on Bitcoin L1 unless the protocol changes.
3a2d29 4y ago
Not to be super “arm chair psychologist” about this, but I always thought the whole “you deserve it if you got scammed” mentality comes from the people that believe crypto will replace all modern finance. For crypto to replace modern finance, it needs to be better in every way (so it’s a total replacement). Decentralized currency is better for some things, worse for things like preventing scams. If modern finance prevents scams better, than crypto won’t replace it in that area at least. Solution? Easy: scams aren’t a problem. Modern finance isn’t better in fixing that problem, cause it’s not a problem. Now crypto is once again better in every way.
- douglaswlance 4y ago
  >it needs to be better in every way It only needs to be better in enough ways to persuade enough people to adopt it such that it hits a tipping point and becomes the de facto standard.
  - iJohnDoe 4y ago
    No, it needs to be better in every way. If it’s not, then what’s the fucking point? Popularity and a better replacement are two different things.
    - jacobedawson 4y ago
      Here's a new type of computer - it's exactly the same as your current computer, except it consumes 1/10th of the power... A replacement doesn't have to be better in every single facet.
      - charcircuit 4y ago
        Do you mean 10x the power?
        filoleg 4y ago
        Unless you value inefficiency and spending a lot of money on electricity, the answer is "no", the parent comment actually meant 1/10th power.
granddemolisher 4y ago
I find it as absurd as anyone else. The field is unfortunately rifled with people who are shills and religious believers. I have talked to a few VCs and technical people drilling down into the tech - I had better arguments than them for why someone would use the projects they funded or created.
- jasonwatkinspdx 4y ago
  Just last night the owner of the neighborhood convenience store was asking me to explain NFTs, as one of his other regulars was hyping them up earlier that day. This man has run his business for decades, understands commercial banking services, etc. I could not for the life of me fully convince them that with NFT's, "there's no there there." Like these things have been so hyped by so many people close enough to the main stream that the fomo style "those rich guys have to be onto something smart with this" assumption is incredibly hard to disprove. The closest I got was using beanie babies as an example.
  - ethbr0 4y ago
    I lead with "Amateurs calculate gains; professionals calculate risk."
TrackerFF 4y ago
DYOR = watching 10 min vids from influencers pumping up shitcoins, hanging around in various discord or telegram echo chambers, skimming through whitepapers you don't understand.
agumonkey 4y ago
Research is fuzzy word in this bubble. I've seen people crafting their own tiny metric: twitter liveness, github activity, size of source code, website quality. White paper reading (I skimmed through a few, it felt like marketing speach most of the time). It only feels solid for newbs who never designed a system or seen math above HS level.
rglover 4y ago
They say "do your own research" and then when you do and have questions about difficult to conceive (or seemingly irrational things) they belittle you, attack you, and—at least on Twitter—reply with snarky memes. As soon as I started investigating Ethereum, ERC-20 tokens, etc. at a technical level, I realized it was a house of cards of immense proportions. The place that didn't happen? Bitcoin. There's not a lot of esotericism around Bitcoin (skim 1-2 books, listen to a couple of talks on YouTube, and generally speaking you "get it"). If you're genuinely interested, people are more than happy to help you and set you on the right path.
- acover 4y ago
  What's wrong with erc20 tokens?
  - cypress66 4y ago
    Not him, but in my opinion upgradeable contracts (not all erc20 use them of course)
Spartan22 4y ago
That's a straw man. Doing your own research doesn't guarantee protection against all scams or losses, it just increases it and scams and freezes are to be expected, that's why diversification and taking profits is key. Very flawed argument.
yieldcrv 4y ago
That's not the impression I get about this one action being discussed, but odd take. There are a variety of amateurish and hysterical things about this Solend project. Why don't you just talk about that project? Like, how the liquidation won't be that bad? Or how half a million dollars in Solend tokens gets to vote to seize $170m of funds? those things are hilarious.
SergeAx 4y ago
NFT is just an URL pointing to CDN (or even S3) stored on the ledger, how one can "lose" it?
wyager 4y ago
Basically anyone I consider especially credible has been consistently saying "everything except bitcoin is overwhelmingly likely to be a scam", which has proven to be a fairly reliable heuristic. I think anyone who actually "DTOR" and has the brain power to interpret the results comes to a similar conclusion.
saurik 4y ago
Solend is just some random lending market that I--despite being in this space full time--don't think I've ever heard of... supposedly it is similar to AAVE, but on Solana? Just because something happens "in more and more mainstream chains" is meaningless: the chain on which something is running is unrelated to whether it is a good idea or not. I want to be very clear about this: I highly doubt that any normal person CAN do enough research to safely manage loans or borrow and invest with leverage, which is what these lending platforms are for, but that doesn't mean that they are fundamentally broken or are scamming people.
physicsguy 4y ago
Like with normal investing, consumers do not have the ability to “do their own research” about the internals of companies who create and promote cryptocurrencies. Which means that the research is flawed.
- cormacrelf 4y ago
  This one was about the concentration of voting power. It turned out that a single, anonymous owner of governance tokens had enough votes to decide this hugely consequential issue on their own. Almost as if corporate shareholding concentration and acquisition-disclosure laws are as good as it gets for "decentralisation" of decision-making, and crypto is now going to have to reinvent that as well. Like, there are literally already laws in many jurisdictions that prevent multiple apparently-independent parties conspiring to avoid jumping over ownership thresholds but nevertheless acquire a majority of a company. Have fun emulating that with pseudonymity, no central regulator and no law enforcement with jurisdiction everywhere the participants are!

jakelazaroff 4y ago

If you want a non-Reddit summary: https://web3isgoinggreat.com/?id=solend-dao-passes-proposal-to-take-over-the-account-of-a-large-holder-with-a-position-that-poses-systemic-risk https://web3isgoinggreat.com/?id=solend-dao-passes-proposal-...

moralestapia 4y ago
"The proposal elicited strongly negative reactions from many in the crypto community, who feel that a project taking over a user's account flies in the face of the concept of defi and sets a dangerous precedent." LOL
DantesKite 4y ago
Thank you. Following all these events has been difficult and having a place that provides context for each of these events is so useful.

55555 4y ago

There is some more analysis/coverage here: https://twitter.com/FatManTerra https://twitter.com/FatManTerra > The Solend team just confirmed to me that when this change is implemented, the whale will instantly be partially liquidated down to a safer ratio. SOL is $32 but his current liquidation price is only $22. On the fence about the main proposal, but I do not agree with this part. This is messed up.

Kiro 4y ago

Readable link on mobile: https://www.reddit.com/r/CryptoCurrency/comments/vfszpt/solend_the_largest_lending_market_on_solana_is/ https://www.reddit.com/r/CryptoCurrency/comments/vfszpt/sole...

mminer237 4y ago
New reddit's even worse. Here's the better mobile version: https://i.reddit.com/r/CryptoCurrency/comments/vfszpt/solend_the_largest_lending_market_on_solana_is/ https://i.reddit.com/r/CryptoCurrency/comments/vfszpt/solend...

baq 4y ago

defi at its best. zero upside of centralized finance with all the downsides, after all.

Melting_Harps 4y ago
> defi at its best. zero upside of centralized finance with all the downsides, after all. DeFi definitely over promised, and under delivered: the part that I take issue with is why build these tools on centralized alt currencies? I mean if you think NFTs are the extent of DeFi (much of which is what web3 hinged on) than this was predictably going to fail just like the ICO craze did. Smart contracts based on oracles are likely to be the real big advent, and I foresee it to be what Dorsey is proposing with now the absurd titled 'web5.' I just can't see why anyone would place this much trust in a PoS coin with a central governance and with major stake by VC in SV. The whole point was to get away from these gate-keepers, not allow them to have a major share of the coins in existence where they can, likely have, cornered the entire market. Whatever, a purging was necessary: I hope this makes CONbase fold once and for all. I just wish I had kept my cash and been able to take advantage of this major dip in BTC: I made major purchases back when we hit mid 30s (~50% of ATH) after liquidating some positions in late Nov.
- scrlk 4y ago
  >I just can't see why anyone would place this much trust in a PoS coin with a central governance and with major stake by VC in SV. In a bullrun, no one cares about "decentralisation" or "fundamentals", they just want to make as much money as possible, even if it means interacting with CEXs/CeFi/centralised L1 scamchains etc. Only when things go south do people understand why "decentralisation" is important.
  - Melting_Harps 4y ago
    > Only when things go south do people understand why "decentralisation" is important. So the greater fool theory isn't a feature of the platform as it's often portrayed as by it's detractors, but rather a self-imposed one by the new cohorts? I guess that while the tech matures the fomo aspect never seems to go away regardless of time. > because the decentralized cryptocurrencies are expensive to transact with — because many people, like you, strongly prefer to use the decentralized ones and so pay a premium to do so. It's currently .20 to do a 10 min tx on BTC layer 1, and near free and instant on layer 2. How is this expensive?

flaque 4y ago

The current headline "Solana just seized $170MM of user funds to prevent a decrease in Solana's price" is factually incorrect. A project on Solana, called "Solend", froze $170m of funds deposited into its protocol. "Solana" didn't seize the funds, nor was the purpose specifically to protect Solana's price.

55555 4y ago
Sorry, I misattributed this in a big way. > nor was the purpose specifically to protect Solana's price. I think it was. What else would the purpose be? Note that I think the true purpose of "preventing Solana network downtime" would be to protect the price. They're trying to avoid cascading liquidations down to zero, because everyone involved in the governance is holding substantial amounts of Solana. I think letting the liquidations happen on-chain, and even cascade, is much more in the spirit of crypto. But an argument could be made, just like with what happened in the LME Nickel market, if you think that letting people wrestle for control of the chain is true decentralization, or if you think that the true goal of a market provider is to provide stability above all else... Forcibly "partially liquidating the position" above liquidation price is pretty indefensible. Are they going to point to a line in their TOS that says that at the end of the day they always have the right to do whatever they want?
- tylersmith 4y ago
  This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted.
  - laweijfmvo 4y ago
    > This is entirely about a single a project trying to prevent cascading issues within itself. Claiming this is about Solana itself is a lie and this post should be deleted. I'm trying to understand this, but it's beyond me. Can someone ELI5? Here's what I get: Someone borrowed $108M (in USDC and USDT) and put up 5.7M SOL ($170M USD) as collateral, with the terms that if SOL should fall the lender can liquidate the SOL to recoup their loss; in this case, if SOL reaches $22.30, they can recoup ~$20M USD. This all sounds like a perfectly normal lending process. SOL is (was) currently at $32, but the claim is that the borrower seems to have no interest in taking any action and allowing the liquidation to occur. Question: who's making this claim and on what basis? The next claim is that this liquidation, if it were allowed to occur, would cause the price of SOL to fall even further, which also makes sense. The market cap of Solana seems to be ~11.5B (billion with a B); $20M shouldn't be the end of the world? 24hr volume is ~$2B, so this would be 1%. Question: why is allowing this liquidation the end of the world? Last question: what does any of this have to do with Solend? Are they the ones that lent the $108M out, or are they just the middle man? If the former, is the concern that they won't be able to recoup their losses under the terms of the contract and falling price of SOL?

55555 4y ago

Sorry, I've read this again and now I think this has little to do with Solana and entirely to do with Solend, and I think they're separate. Maybe someone who knows more about the space can clarify things. I now presume the funds needed to be deposited in Solend's smart contract in order for the trader to borrow the funds against his collateral, and Solend is pushing a patch in order to modify the code so they can seize the funds that are held within their own smart contract. So the Solana team may be totally innocent. But it's still news, because Solend doesn't look much like a "decentralized" lending platform where no one can seize your funds if they can seize your funds and modify the loan and partially raise the liquidation price, and I assume this is the biggest market on Solana. It's quite reminiscent of the ETH split / DAO hack.

jacquesm 4y ago
You could simply delete your post.
- 55555 4y ago
  I thought there was a 10 minute rule. But actually I can still edit the headline and have. It's pretty big news imo.
  - junofan 4y ago
    You might want to remove the editorializing in your title as well.
    - nrmitchi 4y ago
      The "headline" of the reddit post OP linked to is way to long to be a HN title. The headline on HN has already been updated to "Solend just seized...", rather than "Solana just seized..."
    - heartbeats 4y ago
      This is a correct description, though. From the quote in the article (emphasis added): > [A large liquidation] could cause chaos, putting a strain on the Solana network. Liquidators would be especially active and spamming the liquidate function, which has been known to be a factor causing Solana to go down in the past. > Letting a liquidation of this size to happen on-chain is extremely risky. DEX liquidity isn’t deep enough to handle a sale of this size and could cause cascading effects. Additionally, liquidators will be incentivized to spam the network in an effort to win very lucrative liquidations. This has been known to cause load issues for Solana in the past which would exacerbate the problems at hand. So, according to Solend, there are two issues at stake here: 1. The network might have technical problems processing the amount of transactions. 2. DEX liquidity isn’t deep enough to handle a sale of this size and could cause cascading effects What they mean by this second point is that, should a sale happen, then: 1. not enough people will stand willing to buy at a favorable price ("liquidity isn't deep enough") 2. this price crash could cause others to get liquidated in turn ("cascading effects") This is a statement about the impacts on prices, so IMO it's not editorialized.

ChuckMcM 4y ago

And @patio11's take : https://twitter.com/patio11/status/1538601104098852865 https://twitter.com/patio11/status/1538601104098852865 which is illuminating as well. The whole "crypto is speed running through the finance playbook" theme is fascinating to me.

melony 4y ago
So what is the downside of crypto? All the furor seems to be about how the whale's funds were seized. But there is no evidence to the contrary that this won't happen in day to day Wall Street banking. From patio11's > When we say “crypto is speedrunning learning what finance already knows” sometimes it is about attacks but sometimes it is about quotidian topics like “Can you adversarially blow your clients out of trades which you think imperil your firm or other clients?” Answer in traditional finance by the way: yes you absolutely can. Your lawyers have long since thought of that and put that language in your contracts, making it very explicit that if you trigger it you don’t need a vote on Discord to do so. There is nothing that proves that traditional finance is any better than crypto. Though I do not recall the British government arresting Soros when he broke the pound.
- threeseed 4y ago
  > So what is the downside of crypto? * Ordinary people being financially ruined along the journey. * Environment being harmed by pointless mining. * Investment money being wasted on companies that are simply cloning TradFi.
- SgtBastard 4y ago
  >So what’s the downside of crypto? Ecologic vandalism, for one.
- timeon 4y ago
  You are right, crypto is pointless then.
laweijfmvo 4y ago
Thanks, this Twitter thread explained it all in plain English. Edit: Last question: > On the one hand here, we have one (rich) guy. Perhaps he is sophisticated, perhaps not, perhaps he believes code is law, perhaps not. > He used a computer program to borrow $100M. > The people who wrote that computer program are now terrified of it. So does Rich Guy get to keep the $100M in stable coin regardless of what happens to the SOL he put up?

nrmitchi 4y ago

> The proposal succeeded hours after it was proposed, with one whale providing 1 million votes out of the 1.15 million votes in favor. Decentralized my ass

mjburgess 4y ago
Just like land under feudalism -- the land was /everywhere/ !
- octoberfranklin 4y ago
  ... but the ownership was not.
  - mjburgess 4y ago
    Indeed, crypto is fedualism by-design. Libertarianism with land as property is feudalism.
    - octoberfranklin 4y ago
      ... which is why Land Value Tax should be the primary mechanism for funding the government. There really is no private land ownership in the USA. Stop paying your property tax and you'll find out who your landlord is. Raising and lowering that rent payment is the tool for balancing homeownership against what you describe as feudalism.
ATsch 4y ago
Hey, at least we have a good example of what "voting with your wallet" actually looks like if brought to it's logical conclusion.
- jancsika 4y ago
  In all fairness to crypto aficionados, it's not "voting with your wallet." It's more about using whatever is in your wallet to gain control over the financial... Oh shit, someone stole my apes. Can someone PM me to help me recover my apes? I can't vote without them!

wronglebowski 4y ago

How did the "whale" have so much invested in the market but such little voting rights?

qabqabaca 4y ago
The whale has been inactive and almost certainly didn't vote on this proposal. The Solend team tried to reach out to them via socials multiple times and they never responded. You can see their attempts in the "What We've Tried" section here[1] [1] https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxPMnXJUZ1Hn/proposal/HuaL6cDtuNtfnJgvwMnYiZDHVCoLAuDtVFgJD8kYChJ4 https://realms.today/dao/7sf3tcWm58vhtkJMwuw2P3T6UBX7UE5VKxP...
- 55555 4y ago
  > has 170MM staked and isn't picking up the phone Three Arrows Capital?
renewiltord 4y ago
They don't have voting rights because they don't have SOL. They don't have SOL because they put it in there to get USDC+USDT. If they don't believe in the depth of the SOL/USD(C|T) books this could just be a way to sell SOL or go short SOL. This whale is probably just happy to default on the loan and get liquidated at this point.
- granddemolisher 4y ago
  > This whale is probably just happy to default on the loan and get liquidated at this point. Understandable but absurd given the systematic risk.
- wronglebowski 4y ago
  Are they in the red on the loan? The numbers and functions are where I get confused. "a whale has deposited 5.7M SOL ($170M and borrowed 108M USDC and USDT borrowed)" So they put in 5.7 SOL at some price, and used it to borrow stablecoins? If their position is liquidated how does that play out? If he traded coin for coin how do they get the traded assets back?

qabqabaca 4y ago

This needs a title change. The main effect this would have on the Solana network would be congestion due to so many liquidators trying to claim the collateral. It is not related to the price. >Additionally, liquidators will be incentivized to spam the network in an effort to win very lucrative liquidations. This has been known to cause load issues for Solana in the past which would exacerbate the problems at hand.

renewiltord 4y ago

Account gov'd. All my SOLs gone.

tatertots1234 4y ago

Misleading title. This is Solend, not Solana.[1] Not that this would be entirely surprising by Solana itself, which is a centralized chain that has been struggling to handle its network uptime and throughput in recent months. [1] https://mobile.twitter.com/solendprotocol/status/1538441350441422848 https://mobile.twitter.com/solendprotocol/status/15384413504...

Zaskoda 4y ago

I've been working on a game for Ethereum for a while. In recent times, "I" has become "we" and we're getting a fair bit more serious about it. In the last year, we watched a bunch of local startups with relatively weak game concepts get heavily funded to build with Solana. It made me sad and, admittedly, a bit jealous at the time. In retrospect, I couldn't be more happy that we're still building for the Ethereum virtual machine. It turns out that pumping tons of money into a developer community for a half-baked platform isn't the best approach.

ShamelessC 4y ago
You're building ones of those games people get paid to play and you're... proud of this work? As someone who has watched gaming become ruined by micro transactions and loot boxes, that's challenging for me to wrap my head around. Sorry if that seems rude but I literally can't imagine a sketchier idea than that. If you have game dev skills, please please, just make an actual fun video game that you purchase and own for life. You know, something valuable enough that you don't have to pay people to play.
- Zaskoda 4y ago
  No, I'm building a game that runs entirely on EVM. I love the notion that players pay per transaction and that money goes to people who run nodes that support the network. We are not designing any intentional "play to earn" mechanics. But thanks for assuming.
  - UncleEntity 4y ago
    You pay per chess move (or whatever) and the money exits the game economy so the winners (and coders) get nothing but a pat on the back? I don’t really play games but I guess that sounds fun.
zomglings 4y ago
What’s the game? My team has been playing a lot of conquest.eth recently and we’re ramping up on darkforest, too, now. Would love to check it out of there’s anything available for us to try.

moralestapia 4y ago

LOL, all of these "decentralized" currencies turned out to be quite centralized in practice. I like crypto, but it is true that it brings nothing new to the table.

throwoutway 4y ago

A smart contract can be upgraded to take over a whale’s account? How is that a thing? I remember the whole “code is law” on the chain, rather than trusting escrow/third party/judges >Grant emergency power to Solend Labs to temporarily take over the whale’s account so the liquidation can be executed OTC and avoid pushing Solana to its limits. This would be done via a smart contract upgrade. Emergency powers will be revoked once the whale’s account reaches a safe level

itake 4y ago
Contracts can be written as dumb proxies that allow people to 'update' their code (to correct for bugs or add new features). I believe at a high level, the creators have a 'proxy' contract that only they can set a variable that points to new versions of the primary contract.
gruez 4y ago
>I remember the whole “code is law” on the chain, rather than trusting escrow/third party/judges Yeah, but in this case the code is law, it's just that the code in question also says that it can be modified by a majority vote.

rvz 4y ago

Solend. Not Solana. Nice try though. Time to put the pitch forks down and is no different to the DAO hack for Ethereum. Next time, just read beyond the headline, titles rather than quickly spreading outrage everywhere in the comments section. It really doesn't help. Especially if the source is... ...Reddit.

mscarborough 4y ago
> and is no different to the DAO hack for Ethereum. yikes! the system has had material downtime 7 times in the last year. how is that OK?
- rvz 4y ago
  > how is that OK? And who said it was OK? Because I didn't. The whole point is in the Solend case and the reversal of the entire Ethereum chain to restore the funds due to DAO hack tells us that not only 'decentralization' is a complete massive lie, but it also shows the nonsense about 'cOdE iS lAW', and it will only get worse with proof-of-stake. We have been way past the lies of the 'decentralization' narrative since 2016.

foepys 4y ago

This is a fight between whales, nothing more. If the average "retail" coin holder thinks they have any influence, they are dead wrong. This is the cryptocurrency reality where the small man is overpowered by the bourgeoisie who own so much more capital that they only need to fear each other.

tharne 4y ago
> This is the cryptocurrency reality where the small man is overpowered by the bourgeoisie who own so much more capital that they only need to fear each other. How is this any different than the traditional financial system? Remember 2008, where bankers were reckless and the government bailed them out, while regular people who were reckless got f--ked?
threeseed 4y ago
> This is a fight between whales, nothing more It clearly shows you that even in crypto the rich and powerful can manipulate the rules.
- senectus1 4y ago
  Whales are the vast majority of why crypto is broken. too few hold too much. the evidence is blatantly obvious they have been messing with the markets for their own purposes. because they hold so much of it, it makes for a very fickle and fragile market.
tootie 4y ago
Isn't this kinda the same as the equity stakes that owners of public shares can exercise? Except opaque and unregulated?

deleted 4y ago

[deleted]

sva_ 4y ago

Maybe Solend is short for Solana-end

rossdavidh 4y ago

Crypto has been an interesting experiment in rediscovering the reasons for all the financial regulations which we developed for regular currency in the late 19th and early 20th century.

RichardHeart 4y ago

Not your keys not your coins. Not your admin keys, not your coins.

cuteboy19 4y ago
Admin keys?
- yieldcrv 4y ago
  A lot of "decentralized finance" projects have a way for a centralized entity to control them. Often times an individual. And other times a multisignature address controlled by two of the same individual's addresses. Users should be more discerning but are not.
  - EGreg 4y ago
    Is the OA of Hex a centralized entity?
  - vkou 4y ago
    You can't, and don't have time to be discerning if you want to 'get rich quick' during a bull market in an ecosystem that produces nothing of value.
    - yieldcrv 4y ago
      Although there are several things I disagree with in that statement, I can understand why people believe that and participate the way they do: All the extremely high alpha opportunities I’ve had were because the opportunities presented themselves in the protocols that I knew and understood. It was all luck that “my” protocols were the ones that became wildly mispriced or had a flaw or attracted vast interest. And it is distressing seeing all these different protocols have these wild returns or opportunities that I was only able to be aware of in hindsight. But I don't chase. My strategy has been to wait. I do this in many markets and asset classes. Wait for the perfect storm that fits my criteria. It doesn’t matter to me that other people can’t understand it because the trading or valuation book with survivorship bias on its side hasn’t come out or been revealed yet. Since it hasn’t had time to. By the time the equivalent of 1980s technical analysis books come out for this market that some future children will swear by, it will just be a different market. For DeFi sector, I also wait and act fast. I saw a protocol (that I was already familiar with) get hacked and people sold off the tokens. Initially seeing the price drop so hard, I went to twitter to see that there was a hack. Then I went to discord to see what people were thinking. Then in parallel I went to the blockchain as soon as I found the transactions. The information asymmetry immediately presented itself to me. People were afraid of many things happening that could not happen. Like they were primarily afraid that the hacker had a bunch of the project’s token and would sell it - crashing the price before the other users did. Secondarily, they were afraid that the project’s technology was irreparably flawed. And thirdly, the lowest weight, they were afraid that the reputation would be hit. For one and two they were simply wrong. So I bought the dip. For three, well because users aren’t discerning lol… there just isn’t a history to really support that when the supply stays the same, and there are so many for projects can do to appease their audience, so it fit my risk profile and the token recovered to pre-dip prices in a week and I ultimately made 6,000% on it. For the users of the actual product, the ones that took out insurance policies elsewhere were immediately recompensated. There should be news articles about that, but again I’m pretty fine with the information asymmetry where there is a belief that everything goes wrong. People don’t know how to do what I did, but what I did is a very low bar. Its not genius, it is reading some code and blockchain analysis, and the luck/risk is heavily reduced. Confirm with the blockchain and know how that protocol works. Or don’t participate. The people I compete against do that, and the people I compete against in other markets are also highly optimized for those markets, so who cares if “reading code” sounds like an absurdity to today’s wannabe crypto traders. Another thing I do is scan the blockchain for previously unique method signatures. This means someone is launching a clone. It doesn't matter to me that other people don't scan like that or at all, I know that I'm competing with some people that also do this. If you don't know what you're buying, get out of the market. Or be my exit liquidity.

soared 4y ago

Is there a good article. Pearly explaining the potential issue here? I don’t really know anything on chain liquidation, liquidators, etc.

edf13 4y ago

Just to clarify - this is Solana, which is and always has been big vc funded and controlled. It has always been semi-centralised… but has big funds for pr. It isn’t bitcoin or even Eth… it isn’t decentralised

ShamelessC 4y ago
Right, but neither are ETH and BTC for 99.999% of the population that can't read smart contracts or manage their own wallet.
- itsmeacupoftea 4y ago
  Bold of you to think even 80,000 odd people can competently read smart contracts and manage their own wallet.

leodriesch 4y ago

Solana boasts about being scalable and capable of processing more than 1000 transactions per second, how is it that this is threatening the performance of the network?

encryptluks2 4y ago
Solana is constantly down and having transaction fail due to low TPS. I don't think they could lower the performance anymore than it is.
ShamelessC 4y ago
Is this rhetorical? Because it seems naive to assume would honest about any of that.

NelsonMinar 4y ago

I'm sure this seizure of funds will soon be resolved with an orderly resolution process following applicable banking regulations.

yieldcrv 4y ago
Yeah as soon as they went custodial they opened all of traditional finance’s banking regulations on themselves. This is a good reason to call the regulator on them and any OTC desk they actually used.

nativeit 4y ago

If the "whale" happens to be an individual or organization that just needed to launder a shitload of illicit funds and found a handy loophole, then of course they didn't show up to vote--they already got their USD, why bother?

Flatcircle 4y ago

In my humble opinion, so far, the only realistic use of crypto is as a store for digital art. Which is also a form of speculation actually, but at least you can enjoy the tokens as art. If that's the case, then 99 percent of all the chains will fall away and leave just two. ETH and Tezos. presumably new tech will be discovered and new chains will be able to handle that. But as of now, the digitization of art actually works very well in crypto, in the form of NFTs (which is a polarizing word) Solana is a VC back speculative chain which is trying to kickstart art and PFPs on it, because that's basically the only thing you can do right now with where the tech is at. But all the real artists have already made their home on ETH and Tez.

anonymousab 4y ago
> In my humble opinion, so far, the only realistic use of crypto is as a store for digital art Like, IPFS? Does that system count as crypto? I'm not aware of any crypto system that both stores the art itself on chain and can successfully scale and be useful to a global audience (or at least Bitcoin or ethereum levels of use) without significant costs, slowdowns or sacrifices.
- Flatcircle 4y ago
  Both IPFS and onchain. Most of AB stuff is onchain, as is CryptoPunks, most stuff on tezos is hosted elsewhere, and there's a great service that popped up that stores your art in case the chain or service folds. That's the type of new useful business in the space.