The "I Didn't Comment in Another Thread" Thread

[el-remmen]

I can't believe I read the whole thread.

 

[Snarf Zagyg]

I have to admit, watching the whole FTX thing the last few days ....

Schadenfreude is my favorite freude.

What can I say? I have never claimed to be a perfect person. thinking Y'all already knew that, didn't you?

 

[Ryujin]

I have to admit, watching the whole FTX thing the last few days ....

Schadenfreude is my favorite freude.

What can I say? I have never claimed to be a perfect person. thinking Y'all already knew that, didn't you?

I think that I hit my peak schadenfreude when a Canadian crypto guy died and left his clients without access to $250M of their 'assets.' Then came the audits, uncovering of fraud, and even conspiracy theories that he had You Only Live Twiced himself.

 

[Snarf Zagyg]

I think that I hit my peak schadenfreude when a Canadian crypto guy died and left his clients without access to $250M of their 'assets.' Then came the audits, uncovering of fraud, and even conspiracy theories that he had You Only Live Twiced himself.

There have already been so many "peak" moments.

To me, this was the combination of two things-

1. This is the actual quote in an interview from Bankman-Fried (the FTX guy):

Spoiler: LONG

Let me give you sort of like a really toy model of it, which I actually think has a surprising amount of legitimacy for what farming could mean. You know, where do you start? You start with a company that builds a box and in practice this box, they probably dress it up to look like a life-changing, you know, world-altering protocol that's gonna replace all the big banks in 38 days or whatever. Maybe for now actually ignore what it does or pretend it does literally nothing. It's just a box. So what this protocol is, it's called ‘Protocol X,’ it's a box, and you take a token. You can take ethereum, you can put it in the box and you take it out of the box. Alright so, you put it into the box and you get like, you know, an IOU for having put it in the box and then you can redeem that IOU back out for the token.

So far what we've described is the world's dumbest ETF or ADR or something like that. It doesn't do anything but let you put things in it if you so choose. And then this protocol issues a token, we'll call it whatever, ‘X token.’ And X token promises that anything cool that happens because of this box is going to ultimately be usable by, you know, governance vote of holders of the X tokens. They can vote on what to do with any proceeds or other cool things that happen from this box. And of course, so far, we haven't exactly given a compelling reason for why there ever would be any proceeds from this box, but I don't know, you know, maybe there will be, so that's sort of where you start.

And then you say, alright, well, you’ve got this box and you’ve got X token and the box protocol declares, or maybe votes by on-chain governance, or, you know, something like that, that what they're gonna do is they are going to take half of all the X tokens that were re-minted. Maybe two thirds will, two thirds will offer X tokens, and they're going to give them away for free to whoever uses the box. So anyone who goes, takes some money, puts in the box, each day they're gonna airdrop, you know, 1% of the X token pro rata amongst everyone who's put money in the box. That's for now, what X token does, it gets given away to the box people. And now what happens? Well, X token has some market cap, right? It's probably not zero. Let say it's, you know, a $20 million market …

Describe it this way, you might think, for instance, that in like five minutes with an internet connection, you could create such a box and such a token, and that it should reflect like, you know, it should be worth like $180 or something market cap for like that, you know, that effort that you put into it. In the world that we're in, if you do this, everyone's gonna be like, ‘Ooh, box token. Maybe it's cool. If you buy in box token,’ you know, that's gonna appear on Twitter and it’ll have a $20 million market cap. And of course, one thing that you could do is you could like make the float very low and whatever, you know, maybe there haven't been $20 million dollars that have flowed into it yet. Maybe that's sort of like, is it, you know, mark to market fully diluted valuation or something, but I acknowledge that it's not totally clear that this thing should have market cap, but empirically I claim it would have market cap. ...

That's right. So, and obviously already we're sort of hiding some of the magic impact, right? Like some of the magic is in like, how do you get that market cap to start with, but, you know, whatever we're gonna move on from that for a second. So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that's interesting. Like if the total amount of money in the box is a hundred million dollars, then it's going to yield $16 million this year in X tokens being given out for it. That's a 16% return. That's pretty good. We'll put a little bit more in, right? And maybe that happens until there are $200 million dollars in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million, including from like sophisticated players in it. They're like, come on, that's too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

And they’re like ‘10X’ that's insane. 1X is the norm.’ And so then, you know, X token price goes way up. And now it's $130 million market cap token because of, you know, the bullishness of people's usage of the box. And now all of a sudden of course, the smart money's like, oh, wow, this thing's now yielding like 60% a year in X tokens. Of course I'll take my 60% yield, right? So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.

I just want to reiterate- this is what he was saying. He explained it. And even better, he understood it. He huckstered himself.


2. Even better- there was no reason for FTX to fail. That's the funniest part. FTX was an exchange. They had no reason to fail- they made money by other people buying and selling crypto. Period. Then they got involved in loans (which ... that's more problematic, but whatever). But the reason they failed wasn't because they were a crypto market, it's because at a fundamental level, everyone involved is trying to scam each other and make a quick buck. Bankman-Fried used his hedge fund to invest in FTX, while propping both up with his own crypto currency. It's turtles, all the way down, except ... instead of turtles, it's crypto BS, which reeks of buzzwords and whatever passes for "expensive" Axe body wash, I'm sure.

 

[Cadence]

There have already been so many "peak" moments.

To me, this was the combination of two things-

1. This is the actual quote in an interview from Bankman-Fried (the FTX guy):

Spoiler: LONG

Let me give you sort of like a really toy model of it, which I actually think has a surprising amount of legitimacy for what farming could mean. You know, where do you start? You start with a company that builds a box and in practice this box, they probably dress it up to look like a life-changing, you know, world-altering protocol that's gonna replace all the big banks in 38 days or whatever. Maybe for now actually ignore what it does or pretend it does literally nothing. It's just a box. So what this protocol is, it's called ‘Protocol X,’ it's a box, and you take a token. You can take ethereum, you can put it in the box and you take it out of the box. Alright so, you put it into the box and you get like, you know, an IOU for having put it in the box and then you can redeem that IOU back out for the token.

So far what we've described is the world's dumbest ETF or ADR or something like that. It doesn't do anything but let you put things in it if you so choose. And then this protocol issues a token, we'll call it whatever, ‘X token.’ And X token promises that anything cool that happens because of this box is going to ultimately be usable by, you know, governance vote of holders of the X tokens. They can vote on what to do with any proceeds or other cool things that happen from this box. And of course, so far, we haven't exactly given a compelling reason for why there ever would be any proceeds from this box, but I don't know, you know, maybe there will be, so that's sort of where you start.

And then you say, alright, well, you’ve got this box and you’ve got X token and the box protocol declares, or maybe votes by on-chain governance, or, you know, something like that, that what they're gonna do is they are going to take half of all the X tokens that were re-minted. Maybe two thirds will, two thirds will offer X tokens, and they're going to give them away for free to whoever uses the box. So anyone who goes, takes some money, puts in the box, each day they're gonna airdrop, you know, 1% of the X token pro rata amongst everyone who's put money in the box. That's for now, what X token does, it gets given away to the box people. And now what happens? Well, X token has some market cap, right? It's probably not zero. Let say it's, you know, a $20 million market …

Describe it this way, you might think, for instance, that in like five minutes with an internet connection, you could create such a box and such a token, and that it should reflect like, you know, it should be worth like $180 or something market cap for like that, you know, that effort that you put into it. In the world that we're in, if you do this, everyone's gonna be like, ‘Ooh, box token. Maybe it's cool. If you buy in box token,’ you know, that's gonna appear on Twitter and it’ll have a $20 million market cap. And of course, one thing that you could do is you could like make the float very low and whatever, you know, maybe there haven't been $20 million dollars that have flowed into it yet. Maybe that's sort of like, is it, you know, mark to market fully diluted valuation or something, but I acknowledge that it's not totally clear that this thing should have market cap, but empirically I claim it would have market cap. ...

That's right. So, and obviously already we're sort of hiding some of the magic impact, right? Like some of the magic is in like, how do you get that market cap to start with, but, you know, whatever we're gonna move on from that for a second. So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that's interesting. Like if the total amount of money in the box is a hundred million dollars, then it's going to yield $16 million this year in X tokens being given out for it. That's a 16% return. That's pretty good. We'll put a little bit more in, right? And maybe that happens until there are $200 million dollars in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million, including from like sophisticated players in it. They're like, come on, that's too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

And they’re like ‘10X’ that's insane. 1X is the norm.’ And so then, you know, X token price goes way up. And now it's $130 million market cap token because of, you know, the bullishness of people's usage of the box. And now all of a sudden of course, the smart money's like, oh, wow, this thing's now yielding like 60% a year in X tokens. Of course I'll take my 60% yield, right? So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.

I just want to reiterate- this is what he was saying. He explained it. And even better, he understood it. He huckstered himself.


2. Even better- there was no reason for FTX to fail. That's the funniest part. FTX was an exchange. They had no reason to fail- they made money by other people buying and selling crypto. Period. Then they got involved in loans (which ... that's more problematic, but whatever). But the reason they failed wasn't because they were a crypto market, it's because at a fundamental, everyone involved is trying to scam each other and make a quick buck. Bankman-Fried used his hedge fund to invest in FTX, while propping both up with his own crypto currency. It's turtles, all the way down, except ... instead of turtles, it's crypto BS, which reeks of buzzwords and whatever passes for "expensive" Axe body wash, I'm sure.

Holy... That feels like an Onion thing...

 

[Snarf Zagyg]

Holy... That feels like an Onion thing...

I know! And yet ... there are (were, I guess at this point) people defending this BS. Really! Saying other people were just "too dumb" to understand.

As long as more fresh money is coming in, things work out. And that's true in anything, from stock markets to Ponzi schemes. It's when the money starts pulling out that you have to worry about whether you have something of value (like a share of stock of a company that has assets) or .... a "box that literally does nothing."

 

[Ryujin]

There have already been so many "peak" moments.

To me, this was the combination of two things-

1. This is the actual quote in an interview from Bankman-Fried (the FTX guy):

Spoiler: LONG

Let me give you sort of like a really toy model of it, which I actually think has a surprising amount of legitimacy for what farming could mean. You know, where do you start? You start with a company that builds a box and in practice this box, they probably dress it up to look like a life-changing, you know, world-altering protocol that's gonna replace all the big banks in 38 days or whatever. Maybe for now actually ignore what it does or pretend it does literally nothing. It's just a box. So what this protocol is, it's called ‘Protocol X,’ it's a box, and you take a token. You can take ethereum, you can put it in the box and you take it out of the box. Alright so, you put it into the box and you get like, you know, an IOU for having put it in the box and then you can redeem that IOU back out for the token.

So far what we've described is the world's dumbest ETF or ADR or something like that. It doesn't do anything but let you put things in it if you so choose. And then this protocol issues a token, we'll call it whatever, ‘X token.’ And X token promises that anything cool that happens because of this box is going to ultimately be usable by, you know, governance vote of holders of the X tokens. They can vote on what to do with any proceeds or other cool things that happen from this box. And of course, so far, we haven't exactly given a compelling reason for why there ever would be any proceeds from this box, but I don't know, you know, maybe there will be, so that's sort of where you start.

And then you say, alright, well, you’ve got this box and you’ve got X token and the box protocol declares, or maybe votes by on-chain governance, or, you know, something like that, that what they're gonna do is they are going to take half of all the X tokens that were re-minted. Maybe two thirds will, two thirds will offer X tokens, and they're going to give them away for free to whoever uses the box. So anyone who goes, takes some money, puts in the box, each day they're gonna airdrop, you know, 1% of the X token pro rata amongst everyone who's put money in the box. That's for now, what X token does, it gets given away to the box people. And now what happens? Well, X token has some market cap, right? It's probably not zero. Let say it's, you know, a $20 million market …

Describe it this way, you might think, for instance, that in like five minutes with an internet connection, you could create such a box and such a token, and that it should reflect like, you know, it should be worth like $180 or something market cap for like that, you know, that effort that you put into it. In the world that we're in, if you do this, everyone's gonna be like, ‘Ooh, box token. Maybe it's cool. If you buy in box token,’ you know, that's gonna appear on Twitter and it’ll have a $20 million market cap. And of course, one thing that you could do is you could like make the float very low and whatever, you know, maybe there haven't been $20 million dollars that have flowed into it yet. Maybe that's sort of like, is it, you know, mark to market fully diluted valuation or something, but I acknowledge that it's not totally clear that this thing should have market cap, but empirically I claim it would have market cap. ...

That's right. So, and obviously already we're sort of hiding some of the magic impact, right? Like some of the magic is in like, how do you get that market cap to start with, but, you know, whatever we're gonna move on from that for a second. So, you know, X tokens [are] being given out each day, all these like sophisticated firms are like, huh, that's interesting. Like if the total amount of money in the box is a hundred million dollars, then it's going to yield $16 million this year in X tokens being given out for it. That's a 16% return. That's pretty good. We'll put a little bit more in, right? And maybe that happens until there are $200 million dollars in the box. So, you know, sophisticated traders and/or people on Crypto Twitter, or other sort of similar parties, go and put $200 million in the box collectively and they start getting these X tokens for it.

And now all of a sudden everyone's like, wow, people just decide to put $200 million in the box. This is a pretty cool box, right? Like this is a valuable box as demonstrated by all the money that people have apparently decided should be in the box. And who are we to say that they're wrong about that? Like, you know, this is, I mean boxes can be great. Look, I love boxes as much as the next guy. And so what happens now? All of a sudden people are kind of recalibrating like, well, $20 million, that's it? Like that market cap for this box? And it's been like 48 hours and it already is $200 million, including from like sophisticated players in it. They're like, come on, that's too low. And they look at these ratios, TVL, total value locked in the box, you know, as a ratio to market cap of the box’s token.

And they’re like ‘10X’ that's insane. 1X is the norm.’ And so then, you know, X token price goes way up. And now it's $130 million market cap token because of, you know, the bullishness of people's usage of the box. And now all of a sudden of course, the smart money's like, oh, wow, this thing's now yielding like 60% a year in X tokens. Of course I'll take my 60% yield, right? So they go and pour another $300 million in the box and you get a psych and then it goes to infinity. And then everyone makes money.

I just want to reiterate- this is what he was saying. He explained it. And even better, he understood it. He huckstered himself.


2. Even better- there was no reason for FTX to fail. That's the funniest part. FTX was an exchange. They had no reason to fail- they made money by other people buying and selling crypto. Period. Then they got involved in loans (which ... that's more problematic, but whatever). But the reason they failed wasn't because they were a crypto market, it's because at a fundamental level, everyone involved is trying to scam each other and make a quick buck. Bankman-Fried used his hedge fund to invest in FTX, while propping both up with his own crypto currency. It's turtles, all the way down, except ... instead of turtles, it's crypto BS, which reeks of buzzwords and whatever passes for "expensive" Axe body wash, I'm sure.

That these guys can suck people in, while telling them that they're being sucked in, is what has always confused me about the whole crypto market. Same with how everything went into the toilet in 2008. I mean, who would have ever expected a piece of paper, based on a piece of paper, that was based on a piece of paper, that was based on a loan that was, by design, intended to lose money would ever result in a loss?

 

[Ryujin]

I know! And yet ... there are (were, I guess at this point) people defending this BS. Really! Saying other people were just "too dumb" to understand.

As long as more fresh money is coming in, things work out. And that's true in anything, from stock markets to Ponzi schemes. It's when the money starts pulling out that you have to worry about whether you have something of value (like a share of stock of a company that has assets) or .... a "box that literally does nothing."

Well the box does actually do something. It burns electrons and costs a fortune in electric power bills. We've actually kicked people out of school for trying to set our labs up as crypto-mining facilities.

 

[RealAlHazred]

I would love, love, love it if FTX's collapse was definitively due to the inherent flaws in the concept of cryptocurrency. However, the ultimate cause of the failure was the CEO of Binance, CZ (what is it with these guys going only by their initials?), pointing out the SBF's hedge fund held a large amount of FTT (FTX's tokens), and that, if they used the tokens as collateral, that would be a weak position; then CZ started dumping his FTT. Then, other people who listen to CZ's Twitter (I guess that makes them Twits?) also dumped their FTT. And, eventually, as is inevitable if you don't have cash reserves to cover all of your tokens (which no one does) FTX couldn't cover all of the withdrawals. That led to a panic, which led to a collapse, and wash, rinse, and repeat, it's the tulip bulb fiasco all over again. Well, they got me with the tulip bulbs, I'll be damned if they get me with the modern equivalent...

EDIT: Oh, and if anyone is willing to offer me 200 silver florins cash for a Semper Augustus bulb, let me know.

 

[Umbran]

That these guys can suck people in, while telling them that they're being sucked in, is what has always confused me about the whole crypto market.

Richard Gere explained it in Chicago...