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Comment by bb88 | Hacker News Reader

FTX was working on DeFi with their Serum protocol. [1], [2]

Serum was meant to compete with Uniswap. [6]

Oxygen and Solana DeFi tokens were working with FTX on Serum. [3], [4]

Now that FTX has failed, people are saying "FTX was never a De-Fi". We should stop calling it that because if we do we're now "dishonest". [you and 5]

[1] https://www.projectserum.com

[2] https://cryptopotato.com/serum-srm-backs-community-hard-fork...

[3] https://decrypt.co/116652/ftx-solana-defi-serum-starting-ove...

[4] https://cryptoslate.com/defi-protocol-oxygen-held-95-of-supp...

[5] https://www.rebellionresearch.com/is-ftx-a-defi

[6] https://www.coindesk.com/markets/2021/04/28/serum-token-beco...

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I think the point is that what happened with FTX couldn't plausibly happen with a real DeFi protocol like Uniswap. FTX might have had ties to some real DeFi protocols, but that seems unrelated to what happened. FTX's collapse doesn't make them bad by association, just as SBF's shenannigans don't make veganism bad by association.

Serum seems like a special case - it was branded as a DeFi protocol, but wasn't really decentralized, since FTX had sole upgrade authority. Because of that Serum collapsed when FTX did. That couldn't happen with something like Uniswap, where governance is actually decentralized.

I think my point is, don't blame us for getting the nomenclature wrong, when it's clear that the crypto people were smearing the nomenclature around too like a cheap maple syrup, letting it stick to anything that looked "defi-ish"

Now only after FTX failed people are saying, "Oh that wasn't really defi, and you're being dishonest if you call it that."

Basically we're being gaslit after the fact.

Point taken. It depends who you listen to though. In the right circles, there are plenty of thoughtful discussions about the (de)centralization of protocols (that haven't imploded). See [1] just as an example.

But yes, in other circles, there are "crypto personalities" who cater to an audience that's just hoping to get rich quick. Such people usually don't know or don't care about things like contract upgrade mechanisms.

[1] https://www.youtube.com/watch?v=HO693GJZITY

> (that haven't imploded)

(... yet).

There does not exist a morality detector that can measure people's true intentions in crypto. SBF may have had a true heart of gold but is just an idiot. Or he's the smartest con-man in the room and squirreled the money away in a series of numbered bank accounts.

Either way, the crypto press gave him very little skepticism, and lauded his venture -- celebrating him as the next financial genius.

In the traditional banking world, I don't need a morality detector. I just need an FDIC bank.

You don't need a morality detector, just a couple rules of thumb:

- Not your keys, not your crypto. I.e. don't trust a random foreign company like FTX to custody your funds. If you really don't want to self-custody, there are reputable, insured custodians like Anchorage or Coinbase Custody.

- Don't use niche DeFi protocols if you don't know much about them; stick to widely-used protoocls like Uniswap, Curve, Aave, etc.

It's not foolproof, but neither is traditional finance. There are plenty of ways to lose your money there, particularly if you're looking to get rich quick with exotic investments.

In fact FTX was getting into equities, so it's not just crypto investors who will probably lose money (pending bankruptcy proceedings). It's anyone who decided to trust a questionable Bahamian company with their assets, crypto or not.

Wasn't FTX considered a reputable custodian before it imploded? That's been my understanding but I didn't pay much attention before it went belly up.

They did have a fairly clean brand, but I wouldn't compare them to say Anchorage, which is a US-based bank and qualified custodian. There are more regulatory as well as technical protections with a firm like Anchorage.

I would compare FTX to say Tastyworks. Clean brand, but they're not a bank, not insured, and not focused on custody, so it wouldn't really be prudent to store idle cash or crypto with them.

This actually gets into "regulated" vs "buyer beware" banking markets. And crypto is still a "buyer beware" market where reputation can be bought with super bowl ads. And then getting "glowing" reviews from the crypto press on their sudden "success".

True custodial banks could in fact be fraudulent for allow e know. But they don't buy super bowl ads to buy reputation -- they've earned it over the course of decades.

Real banking should be boring.

These intellectual contortions are great for creating clever arguments, but the entirety of the thefts that were done could only have happened due to centralization. Being a centralization of crypto, FTX was absolutely not and could not have been DeFi. No exchange that centralizes actions, tokens, and crypto is DeFi - even though protocols may appear decentralized.

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