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Incredible. To call all those "Less Liquid" tokens not "Illiquid" is a mastery in self-delusion. $2.1B SRM $981M SOL and then all the shitcoins built on thos

Incredible. To call all those "Less Liquid" tokens not "Illiquid" is a mastery in self-delusion. $2.1B SRM $981M SOL and then all the shitcoins built on those "technologies" where the tokens are their "shares" in those investments. But to call those tokens valuable assumes there's value in MAPS/OXY etc. But MAPS has a total market cap of $3.9m today - the forced liquidations in these positions will 100% crush these coins. Even SOL and SRC. Hell - other than their Robinhood position and the fiat and fiat-tokens, there's almost nothing of real value once these liquidations happen. My guess is less than $700m recoverable, so if you get an offer for >$0.10/dollar on your deposits from a vulture bankruptcy fund, I'd take it.

celestialcheese 4y ago
Oh, and completely forgot about the "hack" https://twitter.com/SlowMist_Team/status/1591429649430519810 https://twitter.com/SlowMist_Team/status/1591429649430519810 So even the less-shit coins SOL are just getting siphoned off. I'd take $0.05/dollar now.
rippercushions 4y ago
MtGox went bust in 2014, and it took them seven years of legal wrangling to come up with an acceptable valuation of the tokens. But MtGox was also based in a single country (Japan) and the vast majority of its funds were in a single crypto (BTC), whose value today remains far higher than it was back in 2014 ($300 or so), which is a big incentive for everybody to come to an agreement fast. FTX will be exponentially more complex on all counts: more jurisdictions, more tokens and almost certainly severely marked down valuations. BTC
- celestialcheese 4y ago
  Yup - i'm a party in the Mt. Gox and it's just an endless stream of weird japanese legalese. Didn't have much so never got approached for a buyout, but if offered I would have taken it.
fallingknife 4y ago
SOL trades $100s of millions per day, which is actually extremely liquid in investment terms. "Less than liquid" is actually quite accurate for lesser known crypto. It's how assets like syndicated debt, that trade much less often, would be described on a balance sheet. "Illiquid" would be more like equity in a private company, where there is no active secondary market at all.
- CPLX 4y ago
  Who are the people “trading” it all day? Unless you feel pretty confident you have a window into what exactly is going on there then I wouldn’t make much of a bet on liquidity. Wash trading and market manipulation is basically the defining feature of all these markets.
- SilasX 4y ago
  Thank you! That’s been a big pet peeve of mine in this discussion, where people casually throw around “illiquid” when the currency is really “liquid but collapsed in value”, which is what was going on with FTT and SOL. Earlier comment: https://news.ycombinator.com/item?id=33539326 https://news.ycombinator.com/item?id=33539326
  - dwater 4y ago
    “Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.” https://www.investopedia.com/terms/l/liquidity.asp https://www.investopedia.com/terms/l/liquidity.asp You have misunderstood the meaning of liquid.
    - SilasX 4y ago
      No, I didn’t. Read the linked comment and its follow-up. Of course it’s a valid concept. But people hastily use it as a drop in replacement for any situation in which they would like more money for any reason, and to blur the difference between illiquidity and insolvency. Just like in the situation the parent described! In the case of FTX, the value of their cryptos had already fallen, and they would take that haircut even if given extensive time to make that sale. There was nothing that would make the cash flows match.
grey-area 4y ago
The story is the same for all these other giants of crypto. Binance, Tether, Bitfinex are all basing their purported asset value on holdings of multiple worthless currencies, many of which they mint and price themselves.
- bboygravity 4y ago
  Interesting to see that you and many others think that "the real financial world" works significantly differently. Countries, (central) banks, family funds and hedge funds are about to fail (or are already failing) in a very similar way but on a much much grander scale.
  - grey-area 4y ago
    Everyone’s a con-artist is neither accurate nor useful. Some things are clearly a con (the operations listed above in my view), most things are not.
  - efficax 4y ago
    the real financial world really does work differently. even bizarre instruments like credit default swaps are rooted in an asset of real value (homes). stocks, bonds, real estate, these are all connected to things that have value or produce value, corporations, governments, land. crypto tokens are pure speculative assets that have value only so long as you can get suckers to buy them. they’re effectively really incredible counterfeits, that will be instantly worthless the moment the moment enough people realize that the sucker pool has run dry
- lupire 4y ago
  Is Binance really in that group? CZ alleged that FTX tried to crash Binance's market a few years ago like Binance did you FTX last week, but failed because they actually hold reserves.
  - grey-area 4y ago
    Yes Binance seem like a scam, and even if totally legit their net worth is in currencies which have fallen dramatically and will keep falling. They haven’t had a proper audit, so you just have to trust them. https://www.bloomberg.com/news/articles/2022-11-11/binance-data-shows-40-of-major-holdings-are-busd-bnb https://www.bloomberg.com/news/articles/2022-11-11/binance-d...
trophycase 4y ago
SRM market cap isn't even 2.1B. There's more to this story as usual. The corruption runs deep.

celestialcheese 4y ago

Oh, and completely forgot about the "hack" https://twitter.com/SlowMist_Team/status/1591429649430519810 https://twitter.com/SlowMist_Team/status/1591429649430519810 So even the less-shit coins SOL are just getting siphoned off. I'd take $0.05/dollar now.

rippercushions 4y ago

MtGox went bust in 2014, and it took them seven years of legal wrangling to come up with an acceptable valuation of the tokens. But MtGox was also based in a single country (Japan) and the vast majority of its funds were in a single crypto (BTC), whose value today remains far higher than it was back in 2014 ($300 or so), which is a big incentive for everybody to come to an agreement fast. FTX will be exponentially more complex on all counts: more jurisdictions, more tokens and almost certainly severely marked down valuations. BTC

celestialcheese 4y ago
Yup - i'm a party in the Mt. Gox and it's just an endless stream of weird japanese legalese. Didn't have much so never got approached for a buyout, but if offered I would have taken it.

fallingknife 4y ago

SOL trades $100s of millions per day, which is actually extremely liquid in investment terms. "Less than liquid" is actually quite accurate for lesser known crypto. It's how assets like syndicated debt, that trade much less often, would be described on a balance sheet. "Illiquid" would be more like equity in a private company, where there is no active secondary market at all.

CPLX 4y ago
Who are the people “trading” it all day? Unless you feel pretty confident you have a window into what exactly is going on there then I wouldn’t make much of a bet on liquidity. Wash trading and market manipulation is basically the defining feature of all these markets.
SilasX 4y ago
Thank you! That’s been a big pet peeve of mine in this discussion, where people casually throw around “illiquid” when the currency is really “liquid but collapsed in value”, which is what was going on with FTT and SOL. Earlier comment: https://news.ycombinator.com/item?id=33539326 https://news.ycombinator.com/item?id=33539326
- dwater 4y ago
  “Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price.” https://www.investopedia.com/terms/l/liquidity.asp https://www.investopedia.com/terms/l/liquidity.asp You have misunderstood the meaning of liquid.
  - SilasX 4y ago
    No, I didn’t. Read the linked comment and its follow-up. Of course it’s a valid concept. But people hastily use it as a drop in replacement for any situation in which they would like more money for any reason, and to blur the difference between illiquidity and insolvency. Just like in the situation the parent described! In the case of FTX, the value of their cryptos had already fallen, and they would take that haircut even if given extensive time to make that sale. There was nothing that would make the cash flows match.

grey-area 4y ago

The story is the same for all these other giants of crypto. Binance, Tether, Bitfinex are all basing their purported asset value on holdings of multiple worthless currencies, many of which they mint and price themselves.

bboygravity 4y ago
Interesting to see that you and many others think that "the real financial world" works significantly differently. Countries, (central) banks, family funds and hedge funds are about to fail (or are already failing) in a very similar way but on a much much grander scale.
- grey-area 4y ago
  Everyone’s a con-artist is neither accurate nor useful. Some things are clearly a con (the operations listed above in my view), most things are not.
- efficax 4y ago
  the real financial world really does work differently. even bizarre instruments like credit default swaps are rooted in an asset of real value (homes). stocks, bonds, real estate, these are all connected to things that have value or produce value, corporations, governments, land. crypto tokens are pure speculative assets that have value only so long as you can get suckers to buy them. they’re effectively really incredible counterfeits, that will be instantly worthless the moment the moment enough people realize that the sucker pool has run dry
lupire 4y ago
Is Binance really in that group? CZ alleged that FTX tried to crash Binance's market a few years ago like Binance did you FTX last week, but failed because they actually hold reserves.
- grey-area 4y ago
  Yes Binance seem like a scam, and even if totally legit their net worth is in currencies which have fallen dramatically and will keep falling. They haven’t had a proper audit, so you just have to trust them. https://www.bloomberg.com/news/articles/2022-11-11/binance-data-shows-40-of-major-holdings-are-busd-bnb https://www.bloomberg.com/news/articles/2022-11-11/binance-d...

trophycase 4y ago

SRM market cap isn't even 2.1B. There's more to this story as usual. The corruption runs deep.