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>> "we'll fund it back up"

This part puzzles me to - immediately agreeing to plug the $320Million hole really makes you wonder how there is that much money freely available to just pay people back so easily.

Cuz there are millions of people buying nft's? And the investors probably have some insurance or clause where they add another $€¥ against interesting valuation as a convertible or something

You _say_ that, but this wouldn't be the first player in this space to say they have billions of dollars to cover everything, when they actually had $0 after having siphoned all profits along the way.

> Cuz there are millions of people buying nft's?

[citation needed]

This absolute reeks of the type of baseless claim that someone living in a bubble surrounded by NFT fanatics would claim. Be careful not to think that the trends within your social network are indicative of the population as a whole.

Because they don’t need $320 million dollars, they need “$320 million” in crypto which is easy enough to create out of thin air

You must be a billionaire if you know how to create $320 million in ETH

You do realize there are a good number of crypto billionaires right?

I mean I get your point and it kinda stands, but the latest batch of crypo fueled wealthy people are less the pioneer/early movers and more the "I'll create a crypto product nobody understands and, boom it has a market cap of a couple hundred billion!". And since you can trade whatever crypto you want for eth, all you have to do is convince people your coin is worth something and you can do exactly the above thing.

There are a good number of startup billionaires too, so why not just make a Google?

I think you are falling prey to selection bias. Yes there are many scammy projects that made a few people rich, and a handful of non scammy projects, but the vast majority do not work.

Just call your buddies over at Bitfinex, and get them to turn on the Tether printer.

Start a new stablecoin (or have connections with one of the existing ones) and promise everyone that you have dollars backing it, then mint $320 million of that coin even though you don't actually have dollars backing it.

The recipe for creating fake dollars in crypto is pretty well established at this point

How many stablecoins have a market cap over a few million? If there was a repeatable formula we'd all be rich dude

First, the fact that we use USD as the denomination for these hacks is hilarious in itsetf.

> they need “$320 million” in crypto which is easy enough to create out of thin air

Second, this is an illustration of basically what you've just articulated: https://news.ycombinator.com/item?id=27149241

Not a perfect analysis but there's about $114B circulating in crypto: https://tomtunguz.com/how-much-money-flowing-into-crypto/

I think it's worth being mindful of who effectively owns the bridge.

Jump acquired certus one, who developed the wormhole. Jump has invested quite heavily in the solana ecosystem, so while $300mm is a lot of money, it's a small price to pay for a firm of their size.

It's also likely that the majority of the money on the bridge was theirs to begin with.

$300 is not a small sum for Jump...this isn't FAANG we're talking about.

Maybe not "small", but surely a sum they can put up without thinking twice.

They're a top trading firm, whose competitors have spent $300mm to run hundreds of miles of cables to save microseconds in latency.

> They're a top trading firm, whose competitors have spent $300mm to run hundreds of miles of cables to save microseconds in latency.

It's microwave towers, and it's to save milliseconds. You're not dealing in mics until you're in the colo.

But those are investments, which will generate huge returns. Throwing $300m to paper over a hack isn't remotely the same.

It's a bit hard to tell how much money/assets they have as they are private but they employ 700 people on trading crypto. I imagine they have made a few bob.

It's only unusual if you make the mistake by thinking about it in terms of US $320 million hard fiat currency.

That's probably NOT what's going to happen.

It's most likely going to be 320 million USDT (Tether) or an equivalent amount of ETH (which was most probably purchased with Tether).

Are you implying this startup can somehow get free Tether? Are they affiliated at all?

And when are they going to open this service up to the public?

It isn't a startup...

https://twitter.com/iamnomad/status/1489245139763703812?s=21

https://twitter.com/JumpCryptoHQ/status/1489301013408497666

Ah I wasn't aware of that. So Jump Trading has a relationship with Tether..?

Not that I’m aware of.

Even if you can get cheap USDT, that's is still real money that can be exchanged.

It's not that surprising, nor unprecedented. Many exchange hacks were immediately refunded.

Trust is the most important thing in crypto, exchanges are making billions in profit, not covering a $320m loss could generate billions in damage by crypto prices plunging, so it makes a lot of economic sense to avoid that.

There are investors holding billions in Solana crypto, so it's in their interest to avoid a Solana loss of trust.

This is what I was thinking. The first players have made excess returns to patch the hole up and it's in their best interests. If everyone panicked due to the hack they would have lost a lot of the value/confidence of their assets that they didn't pay that much for. Whereas original asset holders would much rather keep the confidence/value in the asset.

It does create a morale hazard if that was indeed what happened - at this point just speculation.

> exchanges are making billions in profit

Is this realized profit in real cash, or book profit based on valuations?

Who puts real money into crypto by billions? I somehow doubt that enough actual physical people come to buy crypto. Is this money "invested" by funds?

This whole ethereum thing sounds like the old joke "we exchanged a dog worth 1 million for 2 cats worth 0,5 million each".. yet now they try to find someone who will buy this stuff at those bullshit valuations - to be the one left holding the bag.

Also if so much real money is generated then where are the billionaires? Actual ones who divested from crypto (to lower risk) and bought unsexy real world stuff. I understand that in theory crypto is always growing, but who is coming to buy that 1 BTC for 36k usd? To get billions it would have to be a lot of people.

I'm no accountant, but I trust Bloomberg knows about these things:

> Binance generated at least $20 billion of revenue last year, according to a Bloomberg analysis of its trading volume and fees.

https://www.bloomberg.com/news/features/2022-01-09/binance-c...

> Also if so much real money is generated then where are the billionaires

Same article:

> With $96 billion, Binance CEO Changpeng Zhao is closing in on tech titans including Facebook’s Mark Zuckerberg and Google’s Larry Page and Sergey Brin.

It's pretty easy to swap BTC and the like for USD on Kraken or Coinbase. According to Kraken's order book can buy or sell US$14bn of ETH at the moment and move the price less than 2%. We are not talking $1m cats. I've done stuff like $36k for BTC. That's a small trade really.

> Trust is the most important thing in crypto

That’s not what the crypto shills have been saying for years. It’s supposed to solve everything because it’s trustless.

crypto shills will say anything to get people to buy into crypto and thus inflating their holdings

It is an amusing dichotomy IMO.

Cryptocurrency removes two pieces that you previously needed to trust:

Validity of execution and order of execution.

Without considering smart contracts that's basically enough. With smart contracts there are many valid states that are very undesirable (e.g. pegs breaking, manipulation of prices to liquidate positions) this one would be a peg breaking that subsequently would trigger a cascade of liquidations, at the current state of solana that would also flood the network in people racing to try and grab the liquidation fees[1]

[1]: (a quirk of all of the smart contract platforms I know is that there is no way to ensure that X happens under Y conditions, so instead what people do is set up there systems such that if Y there exists riskless profit for anyone who can make X happen. So once collateralized positions become undercollateralized (e.g. backed by 1.1x) anyone that can return the lended assets (which need to be liquid & fungible) gets the collateral)

> Trust is the most important thing in crypto

What? I thought the whole point was to be trustless?

Ahahahahaha!

Why hello J.P. Morgan.

So can we stop pretending that cryptocurrency is anything but an attempt to recreate the financial system in a way that facilitates ignoring banking regulations?

> Trust is the most important thing in crypto.

No it is not and neither should it be. Blockchains are 'supposed' to be trustless with no need to trust a particular group or some group of keyholders. Otherwise, what is the point?

There is no point in promoting decentralization when the whole chain was reversed due to a hack (The DAO hack) or users still resorting to using centralized exchanges rather than 'decentralised' ones or even running most of the nodes on a centralized server.

I hope you have not proven that you have misunderstood the point of their decentralization claims. It makes it very easy for them to dismiss your comment.

The value of WETH going to zero could cause a near system wide collapse. It is being used as collateral for a staggering number of loans. Bridges in the colloquial way of saying it, are too big to fail.

I wonder if network insiders had been prepared for the eventuality of something like this happening, and were just executing a playbook.

How much impact would a total cryptocurrency collapse have on the outside economy?

Probably a nice uptick

Or millions of working people would suddenly be able to afford a gaming GPU and would disappear into imaginary worlds for a couple of weeks.

Nearly zero.

Crypto (and more so Solona) has an extreme trade deficit, it's importing way more capital then it's currently exporting (the primary export today is blockspace, I think as DAO's start running SASS services, that will increase the exports). The impact today would be nearly zero. As the deficit evens out, that might change. The local crypto economy is pretty young (it's virtually brand new). As it expands these capital flows will probably change.

I haven't read anything concrete that shows a clear contagion risk, but https://twitter.com/angela_walch is one of the people in the space to follow that is talking about it

WETH (on Ethereum itself) is totally different. It's a pretty simple contract, doesn't require code on other blockchains or offchain code, and there are no Ethereum accounts with "special permissions" so the attack surface is much much smaller.

Contract code if anybody is curious. It's less than 100 lines of Solidity, easy to read even if unfamiliar with the language: https://etherscan.io/address/0xc02aaa39b223fe8d0a0e5c4f27ead...

Sure, thought that was implied. WETH on Solona is not the same thing obviously.

They've said that, but has it actually happened?

Yes: https://etherscan.io/address/0x3ee18b2214aff97000d974cf647e7...

What exactly on that page indicates that "we'll fund it back up" has occurred?

Take a look at the internal transactions. Within the last 24h, there's been several transactions where new ETH has been wrapped and sent to the contract. The balance is ~120k WETH now which is around the same amount as the hack.

Here it is on one page - fun to watch $300+ million come off Binance, and get wrapped and transferred to the contract:

https://etherscan.io/address/0xe4f6df25710e75a08cb967e831ea5...

Yes, and I get a mental picture in my mind of a guy walking down the street with $320 in his pocket. Some thugs walk up and take his $320.

So he stops at the nearby ATM and withdraws another $320. Then walks down the same street with even more thugs waiting.