DeFi100 team steal $32m, post abusive message to victims on homepage
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I honestly don't get the cryptocurrency hype. None of the coins I've seen actually seem to work. They are slow, expensive to transfer, carry huge risks if you use them incorrectly. I've never seen a "dapp" that was at all good. The whole ecosystem seems to be scammers, pump and dump, and criminals. Who would put meaningful amounts of money into stuff like this?
Yields at the moment are crushed, but during the hayday you could make insane money.
Almost all crypto trading firms have some sort of defi yield farming presence, and many tradfi firms were thinking about entering the space. Whether they still will and if yields will recover is still an open question.
There are definitely some dapps that are pretty solid imo: uniswap, aave, maker, curve, and alchemix to name a few.
Whether it's all a scam is a good question, but from my perspective it doesn't really matter. The goal is to make money by being smarter than everyone else.
I don't think I'm making the world a better place or really helping anyone besides myself/firm, but that's okay.
Some people think finance is perverse because it attracts tons of top talent and utilizes their skills for a dubious purpose. While this may be true, it's also true of many other industries as well: most notably, big tech. Ultimately, people rarely make employment decisions by thinking of how many people they can help.
It all seems very zero sum. No value is getting created. It's just musical chairs with money, people putting money in and hoping to pull more money out. Problem being, since no value is created, it won't be possible for everyone to take out more money than they've put in. For every dollar gained there is one lost.
As far as doing something like for a job - I wouldn't do it. There's a saying like "Better to be a live jackal than a dead lion, but a live lion is better still and usually easier." In other words, I think if you have the mental equipment to make money in crypto you could probably also make money in an industry that isn't a ponzi scheme depriving the gullible of their savings and the benefit of choosing to do that is that you wouldn't put your own money at risk by interacting with shady exchanges and characters.
I think you might be underestimating the amount of resources that the traditional system uses to manage borrowing, lending, insurance, establishing ownership, transferring large sums, settling disputes, etc.
The adoption of cryptocurrency and smart contracts would replace a lot of the financial industry with tiny smart bits of code. That is the value being created.
Considering that traditional finance has a long history of predatory practices, anything that decreases their influence is a good thing to me.
This kind of thing isn't really valuable lending or borrowing in my view. It's just part of the musical chairs gambling game that is the larger cryptocurrency ecosystem. It's also not possible (that I know of) for cryptocurrency to supplant our current lending/borrowing system. If I want to borrow 100k to refit the kitchen in my restaurant, can I do that with cryptocurrency? I haven't seen the defi solutions for business loans in other words, just the defi solutions for "I want to 100x the risk/reward when I buy bitcoin calls expiring next week."
These are the problems being worked on in defi right now and why people are so excited about it.
> in the cryptocurrency future, how will it be easier for a restaurant to use their business as collateral to take cash to do upgrades?
In the idealized future, the restaurant would have their complete transaction history available on-chain for lending contracts to use. Then, instead of a banker making a decision if the restaurant deserves the loan, an algorithm can make that determination and instantly grant the loan. Such a contract might use data points like amount of restaurant supplies purchased, number of customers, average sale price, demographics of the location, all of which would be on-chain and available to a contract.
This is good because it removes bias and discrimination that currently exists in the traditional system, increases the speed at which your restaurant owner can access their capital, and decreases the overall cost of doing the transaction because humans don't need to be involved.
The benefit you're suggesting, that all the restaurant's transactions would be on the blockchain and so lenders could automatically evaluate the risk, is at odds with my understanding that bitcoin has high transaction costs and slow speeds and it is therefore unlikely that all of a restaurant's patrons would ever be paying with on-chain transactions. Maybe they could pay with something like a Coinbase credit card, and Coinbase could make transaction histories available to lenders - but I have to imagine something like that exists in current finance with our current credit card companies.
Just because code makes the decisions doesn't mean that there is no bias and discrimination built into the code. This will eventually create bigger problems down the road due to the massive scale this can be deployed at when compared to a banker having to make the final call.
It's possible, but only in a round about manner at the moment. To get a regular business loan typically you need to have collateral security, normally that is some combination of property, plant, equipment or financial instruments like shares.
Crypto loans (see AAVE) can only presently be secured by crypto collateral. That's not necessarily a bad thing - it keeps things simple and offchain (ie tangible) collateral can be financialised easily enough with existing tradfi tools. In a round about way if you wanted to get a business loan via crypto at a better rate than your bank, you would borrow from your bank in $ (lets say 2%), swap $'s into something like USDC, deposit it at 7% on chain and then borrow something like Ethereum against it at 3%, you now have positive carry on your loan (4%) and a pile of Ethereum (if you so want).
If you want to deal exclusively in offchain assets as collateral for onchain loans, nobody yet has bridged that gap, its a huge opportunity for sure. UBS I note is experimenting in the space.
https://www.finews.asia/finance/34488-ubs-tokenization-block...
If you have a large crypto portfolio (which many do) to use as collateral, you absolutely can do this.
Why should we trade onymous and regulated predators for anonymous and unregulated predators? If State Street said, everyone who invested in DIA is a sucker, and we're taking their money, they would be prosecuted. These scammer's claim that they will not face consequences is plausible.
Ethereum has been described as a "dark forest" where, if you make the slightest mistake, your money becomes "miner extractable value" and is no longer yours. When I buy stock, my order goes to HFTs who wring every ten-thousandth of a penny out of it they can - ten-thousandths of a penny that are rightfully mine - but my order gets filled. Market structure is destiny, and Ethereum's market structure enshrines frontrunning.
Let's say we start a bank where people can apply for mortgages, and a decentralized network of investors bid on those mortgages. Those investors take on-chain data and feed it through machine learning and whatnot to determine the creditworthiness of the borrowers.
I believe such a system would create decentralized, anonymous, unregulated redlining. The ML algorithms would observe that certain neighborhoods have lower incomes, or that other MLs are bidding higher interest rates for certain borrowers.
I think the biggest misconception cryptocurrency advocates have is that things like trust and equity are problems with technical solutions. They aren't; they are social problems that demand social solutions. That means creating regulations to codify and proliferate (what we desire to be) cultural norms. That means centralization, so that there are people who can be held to account.
ETA: And perhaps the second biggest misconception is that "Finance 2.0" is not just a recapitulation of "Finance 1.0", sans the hard-won restraints on it's abuses and excesses. If you don't believe that these abuses are effectively managed - that should only give you more pause.
Selling an index fund with only two relevant components, which your customers could have bought directly, does not add value.
Well, money launderers do this monetary musical chairs thing too. The launderers' customers pay them pretty hefty fees, so clearly they percieve some value being created (or at least provided) there.
Kinda like when Sotheby's launders drug money at their art auctions. Except now instead of art we have "NFTs".
Can you name any of them?
I'm sure there are some hedge funds and other large investors dabbling in the defi space, but billions of dollars is a pretty large play.
And some fortune 500 companies for two.
https://medium.com/avalancheavax/initial-litigation-offering...
https://old.reddit.com/r/brkb/comments/n3c78z/im_alright_on_...
> The website was hacked yesterday and the message was shown by the hackers. It has been taken down.
Unfortunately, $32M is probably not enough to warrant an investigation.
This kind of stuff is a shame, because there's a lot of ethical and innovative applications in DeFi, like Uniswap, Aave, Compound, and Yearn. There's also index tokens managed via the Set Protocol that have been running for years with no issues. BSC is a fork of Ethereum and the main appeal is lower transaction fees (at the cost of centralization). From my perspective, BSC tends to be forks of Ethereum based projects deployed by devs that have little idea how they work. I look at many projects on BSC as being little better than a casino game.
Heck, a nontrivial number of applications running on BSC are literally casino games. It's somewhat popular as a way of implementing (unregulated and probably illegal) online gaming.