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My understanding is that a lot of their assets were in their own cryptocoin that they borrowed against like: 1. Make million new coins called $mikecoin 2. Sel

My understanding is that a lot of their assets were in their own cryptocoin that they borrowed against like: 1. Make million new coins called $mikecoin 2. Sell 1 $mikecoin to a friend for 1 USD 3. Claim that the "Total Market Cap" for $mikecoin is 1 million USD 4. Borrow Bitcoin or dollars against your $mikecoin reserve.

Geee 4y ago
This seems to be the trick. I think this same thing also explains the high market cap of many altcoins, such as Solana. Instead of selling and crashing the price, these are held onto and used as a collateral to borrow against.
- oldgradstudent 4y ago
  The two sentences > Instead of selling and crashing the price and > these are held onto and used as a collateral to borrow against. Are not compatible. If selling the assert crashes its price, it is a terrible collateral. I would like to see how lenders justified in writing accepting large quantities of FTT as collateral.
  - rvba 4y ago
    My understanding that it is an extension of the old joke about someone wanting to sell a dog for 1 million that was finally traded for 2 cats worth half a million each. Basically extended comment of michaelbuckbee. You have your $mikecoins "worth" 1 million and someone else makes $annacoins worth 1 million and some other party makes $bobcoins worth 1 million - and you each "lend" them to each other to make a complicated net. Then Mike, Anna and Bob just wait for some people to invest real money - and cash out. People who bought those $mikecoins, $annacoins and $bobcoins think that they can "always sell them back at the market", but the market didnt really exist. From those 1 million coins minted, maybe 250 thousand were sold, rest are held by creators to sell them to bagholders.
    - disqard 4y ago
      Your explanation is the clearest one I've read thus far, of how these token scams work.

Geee 4y ago

This seems to be the trick. I think this same thing also explains the high market cap of many altcoins, such as Solana. Instead of selling and crashing the price, these are held onto and used as a collateral to borrow against.

oldgradstudent 4y ago
The two sentences > Instead of selling and crashing the price and > these are held onto and used as a collateral to borrow against. Are not compatible. If selling the assert crashes its price, it is a terrible collateral. I would like to see how lenders justified in writing accepting large quantities of FTT as collateral.
- rvba 4y ago
  My understanding that it is an extension of the old joke about someone wanting to sell a dog for 1 million that was finally traded for 2 cats worth half a million each. Basically extended comment of michaelbuckbee. You have your $mikecoins "worth" 1 million and someone else makes $annacoins worth 1 million and some other party makes $bobcoins worth 1 million - and you each "lend" them to each other to make a complicated net. Then Mike, Anna and Bob just wait for some people to invest real money - and cash out. People who bought those $mikecoins, $annacoins and $bobcoins think that they can "always sell them back at the market", but the market didnt really exist. From those 1 million coins minted, maybe 250 thousand were sold, rest are held by creators to sell them to bagholders.
  - disqard 4y ago
    Your explanation is the clearest one I've read thus far, of how these token scams work.