Hacker News Reader

Comment by bhaak | Hacker News Reader

Somebody has deep pockets to fix such a blunder.

Where is this money coming from?

Who had enough ETH lying around to refill the bridge? They certainly didn't just buy it on the open market, that would have moved the SOLETH ratio.

View on HN

The parent company is Jump Crypto - crypto HFT

It's parent company is huge HFT trading company too - Jump Trading

https://www.coindesk.com/business/2022/02/03/jump-trading-ba...

https://en.wikipedia.org/wiki/Jump_Trading

Easy - print 300 millions of any one of the half a hundred existing stabletokens, then exchange them for ethereum tokens. Or if they were of the founders of some token, they can spend part of their premine for Eth. Possibilities are endless if the market is "free" :)

That's not actually a thing though. There are people/entities with large ETH holdings who could well be motivated to foot this loss, but they can't just magic (real) money out of thin air.

Bitfinex does not agree

Sell them to dumbasses for real dollars

That is actually a thing.

https://www.coindesk.com/markets/2021/07/16/tether-hasnt-pri...

They’re not playing with real money here.

Its not real money, nobody did put 320M dollars at the table.

Tell me you don't understand stablecoins without telling me you don't understand stablecoins.

Bitfinex already did it once that we know of.

It's not too absurd.

Bitfinex isn't the party in question here. Unless Jump has their own coin they can mint out of thin air and convince people to buy for Ether, or are able to convince any of the other main tokens to mint for them, this scenario isn't even plausible.

Apparently they do, it's called Solana, and the hacker did the minting for them :)

See the top comment.

None of this is remotely accurate and nobody minted Solana. They minted tokens that no longer exist ON Solana. $320 was spent in ETH - a plenty liquid asset that they have that much less of and that lowers the total value of their holdings by that much.

I'm not sure about the state of things in 2017, but in 2022 Coinbase will convert your USDT into USD and let you withdraw it. I have a lot of trouble believing the likes of Coinbase have either not done serious diligence on Tether or are willing to perpetuate what would probably be the largest ponzi scheme in world history by a long shot. Coinbase is a public company with executives that are not eager to go to prison, not a bunch of anons with frog avatars.

This isn't Tiktok.

The folks behind Tether, the pre-eminent stablecoin, are accused of doing exactly this manufacturing of supposedly stable coins out of thin air.

Wormhole is owned by a trading firm, Jump, who is providing the eth to restore the bridge liquidity.

Jump itself just had $320M laying around?

That's quite possible, judging by the huge bonuses a few friends working there got as a SWE.

Jane Street made $8bn in 2020 [1]. $320M is probably peanuts in exchange for maintaining the stability of a market they dominate in capturing arbitrage money on.

[1]: https://www.bloomberg.com/news/articles/2021-06-18/jane-stre...

Jump is very profitable.

Jump Trading Group isn't some rando crypto org, it's a legit hedge fund established in 1999. Supposedly it has at minimum $150M AUM[1] but because it's a private company nobody actually knows the real amount. We can predict that they probably have a few billion in cash lying around if they've been successfully trading for over 20 years. Jump Crypto, the group that bailed out Wormhole, is their crypto trading division.

[1] https://wallmine.com/fund/3mg/jump-trading-llc

Jump is a black hole. I had a friend go there 20 years ago and haven't heard from him since. But he's got a lovely mansion on the North Shore.

$150M is 15% of a billion. Why would they have a few billion in cash if they only have $150M? Numbers seem off.

The numbers are off because it is a private company. They have $150M in disclosed assets, the true number may be magnitudes higher and probably is if the company can cough up $320M on a dime. Unless you have insider trading information there is no way to know Jump's real AUM.

And $300M available for use within 24 hours. I'm sure Google, Netflix and Walmart all have $300M+ they wouldn't care if it went missing. But all the paper and presentations needed to touch a tenth of that sum would take months. But this guys had it on hand as if they were quarters at an arcade.

Ethereum daily trading volume is $21B, the 120k ETH purchase (about $320M) is 1.5% of daily volume, so it wouldn't move markets much at all.

They just market bought ETH, nothing to do with ETH/SOL ratio.

I didn't explain my reasoning there. Most of SOL is in the hands of VC investors and hasn't hit the free market.

If you don't have any other liquid asset, it would make sense to go the route of selling your SOL for ETH. But it looks like this was not necessary and the ETH to fill up the contract again was either at hand or sold over the counter.

The $21B is the trading volume for all pairs. Most ETH pairs are BTC, fiat currencies or stablecoins. If somebody had sold SOL to get ETH that would have been noticeable.

Reply on news.ycombinator.com