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A comment on Why I have zero faith in crypto venture capitalists. Parent comment

Re:Why I have zero faith in crypto venture capitalists by borrowcheckfml on Sunday June 13, 2021 @11:41AM (#27493485)
And crypto projects that are derivatives on real world assets, like fiat currencies (stablecoins) or stocks (synthetic tokens), have equivalent backing. If the project were to dissolve, there would be assets backing that. Not suggesting this is the case here, but I keep seeing this worrisome trend where people are stuck in the Bitcoin and ICO world from 5 years ago and think nothing has changed and they don't really understand the technical details of how DeFi protocols work today.

In the case where tokens are not backed by anything they are often governance tokens, which are kind of like startup equity. Startups without much IP or real estate are commonly valued at millions of dollars. This is no different in that anyone is a VC investing in e.g. future governance rights.

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Re:Why I have zero faith in crypto venture capitalists by slg on Sunday June 13, 2021 @11:56AM (#27493631)
What percentage of cryptocurrencies are backed by real world assets? Who ensures that this backing is actually baked into the cryptocurrency and isn't just some marketing speak? For example there is Tether which claimed to be backed by USD. "[I]t turns out that the stablecoin that used to say it was 100 per cent backed by cash reserves is in fact . . . 2.9 per cent backed by cash reserves".[1]

[1] - https://www.ft.com/content/529eb4e6-796a-4e81-8064-5967bbe3b...

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Re:Why I have zero faith in crypto venture capitalists by mech422 on Sunday June 13, 2021 @12:59PM (#27494155)
And Theranos claimed to have working machines...

Risk is risk - in stock, crypto, or life in general.

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Re:Why I have zero faith in crypto venture capitalists by arcticbull on Sunday June 13, 2021 @05:33PM (#27496715)
That's a false equivalence. Literally every share of a business is supposed to be backed by a business. Zero coins entitle the bearer to any right or interest whatsoever. Even those stable coins don't give you any claim on the backing instruments. Certainly not in Tether town. Says so right in their T&Cs.
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Re:Why I have zero faith in crypto venture capitalists by mech422 on Sunday June 13, 2021 @06:57PM (#27497374)
The key word there is 'supposed'...

Theranos, B. Madoff, and others seemed to feel that was just a suggestion :-P

Also, businesses are not required to buy their stock back from you, so they are not 'backed' any more then crypto is.

If a company goes broke, and you hold common stock - you get nothing

edit:s/there/their/

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Re:Why I have zero faith in crypto venture capitalists by davidgerard on Tuesday June 15, 2021 @05:31PM (#27521777)
In this thread, you're comparing crypto to Madoff and Theranos, and you think this is an argument in its favour.
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Re:Why I have zero faith in crypto venture capitalists by lottin on Sunday June 13, 2021 @11:54AM (#27493612)
A startup equity consists of the startup's net assets, so the owners have a claim on these assets. In the case of these "governance rights" what assets do the holders have a claim on?
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Re:Why I have zero faith in crypto venture capitalists by arcticbull on Sunday June 13, 2021 @05:34PM (#27496725)
Governance tokens are just a glorified twitter poll.
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