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Nobody could have predicted that a company who paid out more than they made in interest would default. Honestly feel like this crash didn't cut deep enough, we

Nobody could have predicted that a company who paid out more than they made in interest would default. Honestly feel like this crash didn't cut deep enough, we are due for another speculative bubble in less than 2 years IMO.

jeltz 4y ago
Isn't that just a classic ponzi scheme?
- dragontamer 4y ago
  Not quite. Celsius lent it's money to 3AC, and 3AC speculated with Luna/Terra. When Luna collapsed, 3AC collapsed and now Celsius is collapsing. It's not a Ponzi. It's a house of cards but not a Ponzi. -------- Celsius was paying 18% APY, but it's loan to 3AC was probably more than 18%. And whatever 3AC gave to Luna/Terra was more than that. If anything, this is the toxic asset problem from 2007 just being relearned by the cryptocoin community
  - 3np 4y ago
    > If anything, this is the toxic asset problem from 2007 just being relearned by the cryptocoin community It's different this time though, with the level of institutionalization and how VC-funded (and even public) capital is directly intertwined in on-chain funds in a way we have not seen play out before.
    - dragontamer 4y ago
      https://en.wikipedia.org/wiki/American_Home_Mortgage https://en.wikipedia.org/wiki/American_Home_Mortgage https://en.wikipedia.org/wiki/New_Century_Financial https://en.wikipedia.org/wiki/New_Century_Financial https://en.wikipedia.org/wiki/Bear_Stearns https://en.wikipedia.org/wiki/Bear_Stearns https://en.wikipedia.org/wiki/IndyMac https://en.wikipedia.org/wiki/IndyMac Is this not an institute that was intertwined into the 2007 crisis? ------- When one bank fails, all the banks "connected" to that bank become at risk of failure. A tree that falls in a forest can knock down other trees. It becomes difficult to predict which trees can knock down other trees unless you publicly map out which trees are close to each other. We didn't know Celsius was connected to 3AC connected to Luna/Terra until after these bankruptcy events. Are there other groups that are connected?
      - 3np 4y ago
        My bad, was a bit tired when commenting and misread it as 2017, thinking you're talking about the last crypto bubble burst. So GP was made in context of the history of digital assets markets. > Are there other groups that are connected? I guess we'll find out soon enough. Not sure if you count publicly known stuff like Bitfinex<>Tether, Coinbase<>Circle<>USDC, FTX<>Solana etc. Then we have initiatives like Binance Ventures and others who have gotten themselves involved all over the place as owners.

jeltz 4y ago

Isn't that just a classic ponzi scheme?

dragontamer 4y ago
Not quite. Celsius lent it's money to 3AC, and 3AC speculated with Luna/Terra. When Luna collapsed, 3AC collapsed and now Celsius is collapsing. It's not a Ponzi. It's a house of cards but not a Ponzi. -------- Celsius was paying 18% APY, but it's loan to 3AC was probably more than 18%. And whatever 3AC gave to Luna/Terra was more than that. If anything, this is the toxic asset problem from 2007 just being relearned by the cryptocoin community
- 3np 4y ago
  > If anything, this is the toxic asset problem from 2007 just being relearned by the cryptocoin community It's different this time though, with the level of institutionalization and how VC-funded (and even public) capital is directly intertwined in on-chain funds in a way we have not seen play out before.
  - dragontamer 4y ago
    https://en.wikipedia.org/wiki/American_Home_Mortgage https://en.wikipedia.org/wiki/American_Home_Mortgage https://en.wikipedia.org/wiki/New_Century_Financial https://en.wikipedia.org/wiki/New_Century_Financial https://en.wikipedia.org/wiki/Bear_Stearns https://en.wikipedia.org/wiki/Bear_Stearns https://en.wikipedia.org/wiki/IndyMac https://en.wikipedia.org/wiki/IndyMac Is this not an institute that was intertwined into the 2007 crisis? ------- When one bank fails, all the banks "connected" to that bank become at risk of failure. A tree that falls in a forest can knock down other trees. It becomes difficult to predict which trees can knock down other trees unless you publicly map out which trees are close to each other. We didn't know Celsius was connected to 3AC connected to Luna/Terra until after these bankruptcy events. Are there other groups that are connected?
    - 3np 4y ago
      My bad, was a bit tired when commenting and misread it as 2017, thinking you're talking about the last crypto bubble burst. So GP was made in context of the history of digital assets markets. > Are there other groups that are connected? I guess we'll find out soon enough. Not sure if you count publicly known stuff like Bitfinex<>Tether, Coinbase<>Circle<>USDC, FTX<>Solana etc. Then we have initiatives like Binance Ventures and others who have gotten themselves involved all over the place as owners.