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Welcome to the world of unregulated finance. There’s a reason the FDIC exists and all banks must be insured.
by ramish94 4y ago
Welcome to the world of unregulated finance.
There’s a reason the FDIC exists and all banks must be insured.
- deleted 4y ago[deleted]
- hanniabu 4y agoThis has nothing to do with defi. This is purely centralized entity shenanigans.
- ChainNet 4y agoThere's nothing decentralized about FTX or Binance. They operate in an opaque manner like any traditional business, transparency comes from forced audits & regulation. Decentralized finance is built on chain where all assets are publicly auditable at all times. EDIT: parent comment talked about decentralized finance, then edited to remove mentions of defi
- three_seagrass 4y agoEven without the edit, your response feels like a no-true-scotsman i.e. an attempt to remove bad actors who deal in decentralized cryptocurrencies from the purity that is defi. What are some large, successful defi organizations today?
- TimJRobinson 4y agohttps://defillama.com/ https://defillama.com/ - there are hundreds. Almost all are open source and transparent.
- potatototoo99 4y agoTornado Cash is pretty successful.
- colinmhayes 4y agonot sure about this one.
- sperm 4y agoUniswap. Large in terms of volume, not org size.
- ChainNet 4y agoUniswap, Curve DAO, AAVE, Compound, Lido, MakerDAO...
- null0pointer 4y agoI don't see at all how you can say calling out literally centralized companies as "not-decentralized" is no-true-scotsman. It's just an obvious fact. > What are some large, successful defi organizations today? In my opinion, if there is an organization behind it then it is, by definition, not decentralized. Yes, even the ones that operate fully on-chain.
- three_seagrass 4y ago>literally centralized companies as "not-decentralized" So defi is only 100% decentralized everything, even if the financial tools are decentralized? That feels like an appeal to purity if ever there were one.
- null0pointer 4y agoOk, my previous comment is a bit unclear about what I mean. In my opinion if there is a group of people, other than the participants themselves, who can control the operation of the financial service then it is not decentralized. There can absolutely be an organization that builds the service, but participants should not be forced to adopt updates and should be free to transfer their entire balance to any other service at any time. I realize I’m on the fringe a bit with this but I think it’s not because I have an extreme idea of what defi is, it’s that there have been so many grifters in the last 5 or so years that have used the buzzword “defi” to sell their shitty reincarnation of long-outlawed shady centralized financial schemes as something revolutionary that it’s shifted the public perception of the term. I’d even agree with you that it’s an appeal to purity.
- hi5eyes 4y ago
- w1nst0nsm1th 4y agoI did not comment but I have some insight on regular finance and took a Udemy course on building your own crypto... And I came to the conclusion that SBF is a crook and the whole crypto space is build on thin air.
- hi5eyes 4y agocongrats on needing to take an entire course to come to that conclusion?
- w1nst0nsm1th 4y agoWell, at least, I knew concretly what it was about (i mean the code is more expressive than a random tl;dr of a white paper). Beside, It's more the remembering of the unfolding of the Subprime crisis and the financial books I read back then that raised the red flag.
- miohtama 4y agoNote that FTX.us is regulated under some US licenses and is unaffected. What was blown up was FTX.com operation that is licensed and regulated in Bahamas. [insert coconut meme.gif here]
- kolbe 4y agoThe FDIC is just a ruse to let "useful idiots" think that everything is okay. In reality, the FDIC charges banks 90% less than the actuarial value of the risk they take on, and banks make wildly risky loans/bets all the time, knowing it's "heads I win, tails the taxpayer loses." Insofar as you can call US Finance any better than crypto, it's because of socialized losses. IMO, bank failures are a much more appropriate solution.
- lottin 4y agoWhat is the 'actuarial value' of the risk a bank takes on?
- kolbe 4y agoI can tell you a bank like say JP Morgan Chase, who is charged 5bp a year (i.e. 5 cents for every $100 dollars), has a much higher chance of catastrophic failure than 1 in 2000. Many banks just like them fail every few decades, and it was generous of me to only say they're undercharged by 90% (i.e. 1 in 200 odds), when the reality is probably more within a range like 1 in 20 to 1 in 100.
- lottin 4y agoSo you're making this numbers up? If banks are being undercharged, the insurer will be incurring losses. It's as simple as that.
- kolbe 4y agoThe insurer is the United States government. They take losses on things all the time. It's called "socialized losses." I referred to it before, and it sounds like you don't even understand these finance 101 (or even basic high school civics) topics, so why are you insulting anyone?
- lottin 4y agoThe insurer is a corporation with its own financial statements, so it's pretty easy to see if it's operating at a loss (and thus subsidising the banking industry) or at a profit (not subsidising it). I guess you didn't know that either.