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I think its the time for education.

Where are the news articles about the stablecoins functioning perfectly? There are a quite a few stablecoins functioning perfectly.

You pressed play on your “oh a crypto thing” script about anything crypto related and tradeable. You’re in comfortable and like company, but the issue with it is that it dilutes the conversation way from the one specific organization that launched Terra and Luna. This is the exact forum that should be talking about system designs, instead has all these odd anti-speculation rants. Half of this forum is paid in lottery tickets, its out of character.



Read up about wildcat banking system in the late-1800's early-1900's. That's what we need to educate people about. Not all the banks failed. Not all the notes were worthless. Many, many people still lost their life-savings.

This is not new. This is not the first speculative bubble. This has all happened before.

There is nothing inherently flawed about the concept of a stable coin. They should still not be considered an investment vehicle.


> its the time for education

It's time for regulation. Financial institutions that can cause systemic damage are regulated and taxed to pay for (a) that regulation and (b) remediation should (a) fail. We need that for crypto.

> are a quite a few stablecoins functioning perfectly

If people believe this, we need special regulation for stablecoins. The one thing more dangerous than a risky asset is a risky asset pretending to be safe. (The regulator and its enforcers can be funded out of a special tax on stablecoin holdings by U.S. persons. Hell, make it revenue positive.)


There will always be things people can interact with

instruction goes in, stablecoin comes out

input output

smart contracts are vending machines placed on the side of an ephemeral gas station

what regulation would you like to see and how would it apply or prevent.. anything with that reality?

I think instead of punitive taxes the regulators could try to make an approved framework seem more attractive, which just creates another additional option for the user


> what regulation would you like to see and how would it apply or prevent.. anything with that reality?

Publicly disclosed audited financials for stablecoin issuers and a tax on holders of crypto assets that funds enforcement and, possibly, restitution if e.g. someone goes homeless. Starting point would be casino regulation.


Luna was functioning perfectly until it wasn't. Tether continues to function, for now.


Netflix was doing great, then other services came along. Local restaurants were doing well, then covid hit. Most things have a life cycle and black swan events happen. Can't be avoided; you can only have a contingency plan.


This is not a black swan event.


An entity attacked the peg with 100,000 BTC, its sort of a black swan event.


Isn't it kinda inevitable that if there is money to be made someone will try to make that money?


if your protocol is vulnerable to a death spiral initiated by any flash loan by anyone at any time, and people told you over and over again, its not a black swan


I concede your point, but I feel like black swan event isn't a real thing if its some structural flaw that's obvious in hindsight,

eg. its obvious the 2008 housing market was going to collapse, so that's not a black swan, so what is an example of a black swan then?


[flagged]


I can’t help but recognize that this is EXACTLY what ‘scoofy is referring to.


I see that too, I think our takeaways are very different


Stablecoins function perfectly until they don't. The others aren't immune to this kind of failure, though they may be more resistant. Once they become unpegged, you can get a "run on the bank", since there's no insurance to protect investors.


Then add insurance.

Imagine the people in the 1920s that were like “you know what would be funny… what if we got the government to add confidence to our private business with public money and then we get all the customers and skim a little bit from them at every turn, I know I know its dumb but that would be funny right”


For reference one protocol offered insurance for UST depegging for a 2% annual cost.


Nice, did it pay out?

I think these unceremonious undramatic payouts should be news


The one I was looking at is a couple weeks out from paying out, but they are collecting everyone's claims right now.


For a bad enough crash, only governments can provide the necessary insurance.




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