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Comment by slg | Hacker News Reader

They aren't doing this because it is the morally right thing to do. They are doing it because they feel that the $320m is important to secure the value of their business, the Solana ecosystem (thanks for the correction arberx), and crypto in general.

My personal interpretation of that, there are a lot of awfully rich people who are scared of the bubble popping.

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Nothing happens in finance because it is "the morally right thing". It's all a game of incentives. Wall Street Banks take disproportionate risks because they are incentivized to do so.

The interesting thing here is how the un-bailout-able nature of ETH affects the players in Crypto. Because ETH can't be magically printed, the VCs have to decide if they will walk away or bail out the retail end users. It looks like they decided to do the latter.

This has happened more than once in Crypto - I can think of the Binance hack, where Binance bailed out the users. OpenSea has also been covering ETH lost by its users who had their Bored Apes stolen because of user mistakes.

I wonder what it is about Crypto that causes large players to cover user loses. I need to learn more.

> I wonder what it is about Crypto that causes large players to cover user loses.

The answer is in the comment you replied to:

> there are a lot of awfully rich people who are scared of the bubble popping.

The value or cryptocurrencies depends on hype and on convincing the next chump that they should buy in. The large players have a lot of money invested which they will lose if the cryptocurrency value tanks because people lost trust. Covering user loses is itself an investment; it contains the damage by making the issue die down.

Exactly, this move tells us that the people behind Wormhole think that $325m is the lower bound for the risk to their previous investment if they didn't act. That means they likely have billions at stake in which they fear losing or like I originally said they are worried it is a bubble that might pop.

or: it's not a bubble but the next era of the web. they see the long term value of being a leading ecosystem and don't want to fumble their position.

Solana ecosystem*

Exploit happened on Solana. Jump Trading has a vested interest in the Solana ecosystem and is effectively the sole market maker on it.

There's a number of market markers besides Jump, like Alameda Research.

I think Wintermute and Efficient frontier also at least dabble.

Were the 2008 bank bailouts done because it was the morally right thing to do or because they felt like it was important to secure the value of the economy.

It seemed like there was a lot of awfully well resourced individuals that were scared of slipping into a depression

>Were the 2008 bank bailouts done because it was the morally right thing to do or because they felt like it was important to secure the value of the economy

Both. It was done to preserve the value of the overall economy. That impacts everyone at every level of society and therefore it was the morally right thing to do. You can argue that the specific action taken wasn't the most effective approach, but the goals were noble in 2008. The goal here is that these rich people don't want to lose their investments.

Not meant as an attack on the parent comment but I've been interested in the concept of judging things by inputs versus outputs. I see aspects of this in many controversial subjects; particularly homelessness. Different groups of people seem to focus on one side and ignore the other side of the equation when making arguments. These groups just end up talking past each other then and don't make progress towards a consensus.

I'm curious what kind of research (or keywords to search for) there is around this topic. Is it just a morality thing or does it go beyond that?

they are scared of bubble popping yet give away $320m. okay.

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