Re:FTX Tapped into Customer Accounts to Fund Risky Bets, Set...
by ChadNauseam on Thursday November 10, 2022 @04:46PM
(#33553863)
There are fully-decentalized exchanges which have to have much less counterparty risk (because anyone could take the other side of your deal, so you don't want to trust them). As a simple example, imagine a contract which I send 1 ETH to, and if you send it 1000 USDC it'll send you the ETH. The big counterparty risk with that system is that the price of ETH will skyrocket and someone else will call the contract to make the trade before I can cancel it, but that kind of thing is hard to avoid in any system.
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Re:FTX Tapped into Customer Accounts to Fund Risky Bets, Set...
by LeafGuild on Thursday November 10, 2022 @05:54PM
(#33554795)
>but that kind of thing is hard to avoid in any system.
No it isn't, that's what limit orders are for. There's still the exact same counterparty risk there anyway, in the form of USDC. Circle is another big dodgy centralized provider. The major critical flaw with all this defi stuff is that it can only reliably trade cryptos for other cryptos. Once you actually try to get any of it out into real assets, the counterparty risk immediately comes back again. No crypto defi stuff can ever solve that. The idea is just bad, it's a scam from the very beginning.