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$12B over several years sounds like a lot until you realize how much volume is in the crypto market - $179B in 24 hours according to one source! https://www.st

$12B over several years sounds like a lot until you realize how much volume is in the crypto market - $179B in 24 hours according to one source! https://www.statista.com/statistics/1272903/cryptocurrency-trade-volume/ https://www.statista.com/statistics/1272903/cryptocurrency-t...

vkou 4y ago
I own a dog. You own a cat. I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. We've just created 2 million dollars of daily trade volume, err, economic activity. When looking at value stolen by scammers, what matters is not the daily trade volume, what matters is how much money was put into the ecosystem [1], and what fraction of it was stolen. [1] Which is a lot less than 180B/day.
- deleted 4y ago
  [deleted]
- hailwren 4y ago
  > what fraction of it was stolen This is the rub. If you’re using mcap and mark-to-market rates for total value stolen, it’s completely reasonable to use the same rate to evaluate the size of the system.
- mattdesl 4y ago
  Even if you only look at stablecoin volume, it is significant. 110B over the last 7 days: https://dune.com/hagaetc/stablecoins https://dune.com/hagaetc/stablecoins I guess you could argue the billions in daily transfers are wash trading, unless the transfer is part of an exploit, and then it’s not wash trading?
- actionfromafar 4y ago
  To be clear, stolen crypto is true economic activity, right? Edit to downvoters: I actually meant it unironically. Thiefs often want to "cash out" as soon as possible. I'm not saying it's a net good, but it feels "real and gritty" as opposed to many other crypto transactions.
- ETH_start 4y ago
  >>I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. Uniswap liquidity providers charge a fee for every swap, proportional to the volume swapped, so faking volume like this would be prohibitively expensive.
- pcthrowaway 4y ago
  I think the main difference here is that your dog/cat don't have markets that they can be traded in relatively easily. There aren't pools of liquidity for which they can be exchanged. Also, your dog and your friend's cat aren't like anything else. The example you constructed is superficially more similar to the NFT market anyway. If dogs and cats were fungible, and there was a market for fractions of both that could be exchanged in and out of, and contained hundreds of thousands of USD in standing liquidity, and the value of your dog was $1 million, and the cat was also $1 million, then sure. Swapping the dog for the cat is approximated by $2 million to the same accuracy that many assets (houses, stocks, etc) are described in notional value.
- llanowarelves 4y ago
  I agree, but everything's price can be (and is) gamed that way though. So to what degree is trade volume indicative of anything in other things?
pigsty 4y ago
How much of that 179 billion was exchanged for legal goods and services other than crypto or cash itself?
solarpunk 4y ago
12B in realized losses, as compared to 179B in unrealized volume. Seems like an apples to oranges comparison there.
- mattdesl 4y ago
  Sure—the point is, $12 billion of transfers being attributable to exploits over several years is quite small considering crypto markets are slinging an order of magnitude more than that every 24 hours.
  - lxgr 4y ago
    That‘s a bit like calling credit card payment fraud negligible by contrasting it with all monetary movements, including HFT trading volumes and interbank payment flows.
    - mattdesl 4y ago
      I am simply putting the number in context. Credit cards dealing with $8B USD of fraudulent charges per year sounds like a staggering amount until you realize it is a small fraction of all transactions. https://www.security.org/digital-safety/credit-card-fraud-report/ https://www.security.org/digital-safety/credit-card-fraud-re...
      - lxgr 4y ago
        Yes, but the issue with your comparison is that you are comparing amounts across categories. Fraud losses are definitionally realized losses, whereas gross crypto transaction volume includes things like a single entity rebalancing funds across wallets or exchanges. On a chain with low or zero fees, a single actor can trivially generate billions of transaction volume like that on a single day.
        mattdesl 4y ago
        Uniswap charges a fee per swap. Generating billions of dollars worth of fake stablecoin transaction volume per day would cost you millions of dollars. The comparison is suitable to show relative scale: $12B over some years sounds like a lot, until you realize it is a small fraction of the total crypto market. Likewise, you could paint VISA as being rampant with fraud by pointing to the many billions lost per annum in credit card fraud, but this represents a small percentage of all VISA activity.

vkou 4y ago

I own a dog. You own a cat. I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. We've just created 2 million dollars of daily trade volume, err, economic activity. When looking at value stolen by scammers, what matters is not the daily trade volume, what matters is how much money was put into the ecosystem [1], and what fraction of it was stolen. [1] Which is a lot less than 180B/day.

deleted 4y ago
[deleted]
hailwren 4y ago
> what fraction of it was stolen This is the rub. If you’re using mcap and mark-to-market rates for total value stolen, it’s completely reasonable to use the same rate to evaluate the size of the system.
mattdesl 4y ago
Even if you only look at stablecoin volume, it is significant. 110B over the last 7 days: https://dune.com/hagaetc/stablecoins https://dune.com/hagaetc/stablecoins I guess you could argue the billions in daily transfers are wash trading, unless the transfer is part of an exploit, and then it’s not wash trading?
actionfromafar 4y ago
To be clear, stolen crypto is true economic activity, right? Edit to downvoters: I actually meant it unironically. Thiefs often want to "cash out" as soon as possible. I'm not saying it's a net good, but it feels "real and gritty" as opposed to many other crypto transactions.
ETH_start 4y ago
>>I say my dog is worth a million dollars. You say your cat is worth a million dollars. I trade you my dog for your cat. Then we trade them back. Uniswap liquidity providers charge a fee for every swap, proportional to the volume swapped, so faking volume like this would be prohibitively expensive.
pcthrowaway 4y ago
I think the main difference here is that your dog/cat don't have markets that they can be traded in relatively easily. There aren't pools of liquidity for which they can be exchanged. Also, your dog and your friend's cat aren't like anything else. The example you constructed is superficially more similar to the NFT market anyway. If dogs and cats were fungible, and there was a market for fractions of both that could be exchanged in and out of, and contained hundreds of thousands of USD in standing liquidity, and the value of your dog was $1 million, and the cat was also $1 million, then sure. Swapping the dog for the cat is approximated by $2 million to the same accuracy that many assets (houses, stocks, etc) are described in notional value.
llanowarelves 4y ago
I agree, but everything's price can be (and is) gamed that way though. So to what degree is trade volume indicative of anything in other things?

pigsty 4y ago

How much of that 179 billion was exchanged for legal goods and services other than crypto or cash itself?

solarpunk 4y ago

12B in realized losses, as compared to 179B in unrealized volume. Seems like an apples to oranges comparison there.

mattdesl 4y ago
Sure—the point is, $12 billion of transfers being attributable to exploits over several years is quite small considering crypto markets are slinging an order of magnitude more than that every 24 hours.
- lxgr 4y ago
  That‘s a bit like calling credit card payment fraud negligible by contrasting it with all monetary movements, including HFT trading volumes and interbank payment flows.
  - mattdesl 4y ago
    I am simply putting the number in context. Credit cards dealing with $8B USD of fraudulent charges per year sounds like a staggering amount until you realize it is a small fraction of all transactions. https://www.security.org/digital-safety/credit-card-fraud-report/ https://www.security.org/digital-safety/credit-card-fraud-re...
    - lxgr 4y ago
      Yes, but the issue with your comparison is that you are comparing amounts across categories. Fraud losses are definitionally realized losses, whereas gross crypto transaction volume includes things like a single entity rebalancing funds across wallets or exchanges. On a chain with low or zero fees, a single actor can trivially generate billions of transaction volume like that on a single day.
      - mattdesl 4y ago
        Uniswap charges a fee per swap. Generating billions of dollars worth of fake stablecoin transaction volume per day would cost you millions of dollars. The comparison is suitable to show relative scale: $12B over some years sounds like a lot, until you realize it is a small fraction of the total crypto market. Likewise, you could paint VISA as being rampant with fraud by pointing to the many billions lost per annum in credit card fraud, but this represents a small percentage of all VISA activity.