Is it? Specifically, what's the equivalent of "credit ratings that were essentially fraudulent"? If you read the smart contract code, misunderstood how it worked, proceeded to invest anyways, and then it blew up, that sounds like something that's on you. If you invested in some opaque financial product (I don't think MBS buyers can go through each mortgage with a fine toothed comb) and the independent third party that's supposed to be evaluating it was actually biased, that's at least partially on the seller and/or third party.
Most of the smart contract system has been based on the assumption that contract termination/violation is not possible. This effectively ignores counter party risk.
If the luna coin collapses UST will start exponentially inflating the supply of luna. If UST users are trying to get out, then the price may go to zero. You can't correct the stable coin by printing coins with zero value.
> Most of the smart contract system has been based on the assumption that contract termination/violation is not possible. This effectively ignores counter party risk.
I mean, maintaining the peg is based on that assumption, but I doubt "price of luna going to zero" is a scenario that serious analysts skipped over. Therefore, the failure to account for that scenario is still on them.
So would you propose an independent third part to evaluate all these various things, and see which ones are, say, backed by fundamentals?
How would you do that evaluation yourself, if it was your job?
I'm assuming that you don't intend your point to be "the only difference is that in the 2008 example, someone who should've called bullshit fucked up, and this time nobody is officially supposed to call bullshit, you're supposed to do it yourself."
> So would you propose an independent third part to evaluate all these various things, and see which ones are, say, backed by fundamentals?
So you want a repeat of the subprime crisis, but by having credit rating agencies rate smart contracts?
>I'm assuming that you don't intend your point to be "the only difference is that in the 2008 example, someone who should've called bullshit fucked up, and this time nobody is officially supposed to call bullshit, you're supposed to do it yourself."
No, that's the difference between the two. caveat emptor vs fraud. Seems like a pretty important difference to me.
Nah, I'm reading your comment as admitting that the idea that any of these should be seen as mainstream investment vehicles is nonsense and that the fraud is in the very presentation of them as such. There are many, many parties pitching people on the idea of investing in this stuff right now without pitching them on reading a bunch of code.
Steph Curry is telling me every day that FTX makes it so I don't have to be a crypto expert. If you're right, and I actually need to do my due diligence for crypto things... FTX is a fraudster, no?
"This is all bullshit based purely on hype but I'm not gonna come out and say that, you just have to realize it by reading the code," basically.
>I'm reading your comment as admitting that the idea that any of these should be seen as mainstream investment vehicles is nonsense
Perhaps? Depending on your view on how much stupidity is allowed, the only thing that qualifies as a "mainstream investment vehicle" is broad market ETFs.
>There are many, many parties pitching people on the idea of investing in this stuff right now without pitching them on reading a bunch of code.
Yeah, that's what "caveat emptor" means.
>"This is all bullshit based purely on hype but I'm not gonna come out and say that, you just have to realize it by reading the code," basically.
you realize that both can be true? If some hustler pitches you some penny stocks and gives you false information (eg. fake earnings reports), that's fraud and definitely not okay. However, if you got suckered into some penny stock because some guy on wsb posted his gains and you got greedy, that's on you.
> If you read the smart contract code, misunderstood how it worked, proceeded to invest anyways, and then it blew up, that sounds like something that's on you.
Not a software engineer or information security professional I gather...
Is it? Specifically, what's the equivalent of "credit ratings that were essentially fraudulent"? If you read the smart contract code, misunderstood how it worked, proceeded to invest anyways, and then it blew up, that sounds like something that's on you. If you invested in some opaque financial product (I don't think MBS buyers can go through each mortgage with a fine toothed comb) and the independent third party that's supposed to be evaluating it was actually biased, that's at least partially on the seller and/or third party.