2739

Not in DeFi! Why do you think you get such great interest rates? Because you’re willing to loan money to terrorists and drug dealers.

2740

2741

So if it’s easy to spoof a fake identity, why not borrow $10M in crypto and if it goes up 10% cash it in and walk away with your $1M profit? If it goes down in value, just walk away and trash your fake identity? Obviously, I don’t really understand crypto!

2742

You can’t borrow $10M with a fake identity unless your debtor is an idiot.

2743

It’s not a matter of faking an identity. You can get a crypto loan by putting up crypto as collateral.

2744

My understanding is that this is working as designed. Whether the design is desirable is highly debateable. Beanstalk gave governance votes based on deposits. So this crypto-raider deposits enough cryptocurrency to get a majority vote and proposed to give all the money to themselves. They don’t need no steenkin’ regulations. No way. So this is the result. And it isn’t the first time this trick has been pulled… I’ve read articles about other crypto projects that have had this happen.

2745

When the design lets someone withdraw $80M in crypto that the person didn’t own, I think the design debate is over.

I wonder if what the person(s) involved in this did is illegal? It has to be illegal, doesn’t it? It’s taking possession of something owned by someone else.

2746

CoDe Is LaW!

2747

In what jurisdiction? What if the person who did this is in Somalia? Play by dumb libertarian rules, die by dumb libertarian rules.

2748

In my post, I called this person a “crypto-raider” because what they have done is an extreme cryptocurrency version of corproate raiding - a crypto version of Gordon Gekko. Buying a majority stake in a company and then stripping it of its assets seems to be legal, and popular. Eddie Lampert and Sears comes to mind. Is this morally right? It isn’t exactly illegal though.

2749

Yeah, it doesn’t seem “illegal” in the way that they performed this raid was perfectly acceptable per the way the code was set up.

It is almost like putting this much money into systems this easily manipulated is a bad idea.

Who knows.

2750

It depends on who you are. Designing a system that can easily be manipulated so you can become mega-rich sounds like a great idea to me!

2751

A lot of these schemes where somebody absconds with a huge wad of cryptocurrency look a lot like inside jobs, or in many more cases, are explicitly just scams.

2752

Yeah, that’s my assumption for most of these.

2753

How odd that there should be so many criminals in and around a system designed to facilitate crime!

2754

Here’s a technical analysis of what happened, in case anyone’s curious. It was a pretty slick attack, though the Beanstalk people left a bunch of dumb vulnerabilities for them to exploit.

Flash loan attacks are extremely common these days. Just search Web3IsGoingGreat for the term and you’ll see dozens of hits.

2755

Again, I’m assuming most of these attacks are inside jobs by the people who design the systems or their friends.

2756

Could be, but at least in this case the protocols are available for everyone to look at, so no need for an insider.

2757

Oh, Thiel is a lot worse than Trumpy. He’s the patron of my old high school classmate Curtis Yarvin, aka Mencius Moldbug, the founding philosopher of the alt-right. He’s straight-up white supremacist.

2758

The thief used “flash loans” which have basically zero duration. The currency is borrowed and returned in the same transaction.