https://twitter.com/LilMoonLambo/status/1582027354188095488?s=20&t=EJ6Qg1cKKRf0u5wq_dEhng
7 Likes
Short thread from more than a year ago
2 Likes
It took him years of study to figure that out?
2 Likes
https://www.bloomberg.com/opinion/articles/2022-10-20/making-crypto-hacking-less-lucrative
About a decade ago, some electricity traders at JPMorgan Chase & Co. read the rule book of the electricity market really closely and noticed that the rules would reward them for insanely uneconomic activity. They did this insanely uneconomic activity, and were richly rewarded. And then they were even more richly fined by regulators. I once wrote about this case:
JPMorgan read the rules carefully and greedily, and exploited the rules. It did this openly and honestly, in ways that were ridiculous but explicitly allowed by the rules. The Federal Energy Regulatory Commission fined it $410 million for doing this, and JPMorgan meekly paid up. What JPMorgan did was explicitly allowed by the rules, but that doesn’t mean that it was allowed. Just because rules are dumb and you are smart, that doesn’t always mean that you get to take advantage of them.
At some very high level of generality, there are the explicit rules — the words of the contract, the mechanisms of the stock exchange, etc. — and then there is a background set of fairness norms. And if you find a way to make a ton of money with a too-clever reading of the explicit rules, the background fairness norms will kick into gear and you will get in trouble. Following the rules is good, but following the rules to absurd places is bad, perhaps a crime.
In crypto … yeesh. In crypto, explicit rules are very popular, and are often coded into computer programs. The rules of a decentralized finance market will be embedded in open-source smart contracts, and you can read them, and if you find a clever way to exploit them — to “hack” the smart contract, or to “manipulate” the market, to use loaded, traditional terms — then you can do that, quickly and efficiently and at scale.
But crypto is also very young, as an industry, which means two things:
All these smart contracts were written 20 minutes ago, they do not have many years of testing, and some of them will have big flaws that someone can exploit.
There is not long-standing agreement on some set of background norms about what to do when that happens.
And so sometimes there will be a “hack” or “exploit” in crypto and people will say “hey that’s great, the contract worked as written, you’re not allowed to complain.” (Thus the scare quotes around “hack” and “exploit”: Some people will deny that those loaded terms apply.) Other times, people will say “this is unacceptable,” and everyone will get together to reverse the transactions and act like they never happened. Other times, people will say “hey let’s call the police,” and perhaps the police will come and arrest the “hacker” for hacking or market manipulation or whatever. There are other possible outcomes. I wrote yesterday, somewhat fancifully, about decentralized autonomous vigilantism as a possible solution to crypto hacks.Still there does seem to be a developing norm that says “if you hack a decentralized finance protocol and run off with a bunch of money, you can keep some of it as a reward for your cleverness, but you have to return most of it because keeping it all would be mean and perhaps a crime.” The model is a “bug bounty,” though sort of after the fact: If you find a flaw in a protocol’s security, they should pay you a reward for pointing it out, but you should not get to take all their money.
And so we talked last week about a guy who did a market manipulation on a DeFi protocol called Mango, taking something like $116 million. The guy’s name is Avraham Eisenberg. Here is a post by Chris Brunet rounding up Eisenberg’s alleged Discord posts as he planned this exploit, which include:
Eisenberg asks: “I’m investigating a platform that could maybe lead to a 9 figure payday. Should I do it”
Someone in the Discord replies “probably … unles it is highly illegal,” and Eisenberg replies “Are there rules these days”
Someone asks “is this just one of those oracle manipulatooor things to drain LPs,” and he replies “Sorta. You take a long position. And then you make numba go up.”
And then Eisenberg himself went on Twitter to issue a “statement on recent events” that might be up there with Satoshi Nakamoto’s Bitcoin white paper as one of the great foundational documents of crypto:I was involved with a team that operated a highly profitable trading strategy last week.
I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are.
Unfortunately, the exchange this took place on, Mango Markets, became insolvent as a result, with the insurance fund being insufficient to cover all liquidations. This led to other users being unable to access their funds.
To remedy the situation, I helped negotiate a settlement agreement with the insurance fund with the goal of making all users whole as soon as possible as well as recapitalizing the exchange.
Mango built a game, and Eisenberg played that game in a highly profitable way, and as a result he got $116 million and the game ended. But now he will give back some of the money so the game can continue for everyone else.
You can imagine a lot of different background norms working here. “Code is law, anything that happens is fine, and adversarial hardening will over time make hacks less likely” is definitely a popular take in crypto, and maybe it’s fine. But my sense is that if you want crypto to be a big industry, if you want it to be appealing to retail investors and large institutions and governments, you will want some other norm. Some norm like “if there’s a hack, someone will fix it.”
Sam Bankman-Fried runs the crypto exchange FTX, and his net worth is pretty directly tied to broad retail, institutional and governmental adoption of crypto. Bloomberg’s Joanna Ossinger reports:
Crypto billionaire Sam Bankman-Fried has outlined a framework for limiting the impact of the hacks and exploits plaguing the industry, including capping the maximum bounty for attackers at $5 million. …
Bankman-Fried, co-founder of digital-asset exchange FTX, proposed in a blog post what he called a “5-5 standard” where hackers keep either 5% of the amount they’ve taken from a protocol or $5 million, whichever is smaller.
Other key provisos are that customers must be made whole and that the hacker is acting in “good faith” and fully intended to cooperate and return most of the assets. In crypto, attackers are sometimes viewed as white-hat hackers who seek to expose vulnerabilities in return for a reward rather than to make malicious gains.
Here is the rest of that post, which consists of Bankman-Fried’s draft proposals for “a set of standards that we as an industry could enact to create clarity and protect customers while waiting for full federal regulatory regimes,” covering things like sanctions, disclosure, securities regulation, decentralized finance, etc. But I suppose the proposed standardization of hacking rewards is the most interesting part. The idea is to have rewards for cleverness that are generous, but not absurd, to reward cleverness without making clever hacking the entire point of the game.
Of course this doesn’t solve everything. For one thing, how do you make hackers follow the industry standards? If a hacker/exploiter/manipulator comes up with a really good trade and steals $500 million, and decides not to give back $495 million of it, what do you do? I suppose the answer is “call the police,” and then you are back to relying on the background norms of the traditional legal system.
Also: What if you find a “highly profitable trading strategy” and you “believe all of [your] actions were legal open market actions, using the protocol as designed,” but others disagree and think you did a hack? “The maximum reward for market manipulation is $5 million” is a fine standard, but you still have to have some way to decide what is “market manipulation” and what is just clever trading.
1 Like
Its worth a read. Interesting.
The basic idea is along the lines that you can’t write a contract that enslaves someone, and then appeal to the contract language and expect the court to enforce your slavery. It seems like some crypto dudes are trying to do objectively unfair things because “the rules” they wrote allow for it, but the law doesn’t just permit any two parties to agree to any set of terms through contract. “Read the fine print” is good advice, but is not an legal cheat code.
When asked to choose one word that describes the space, the two most popular answers were almost evenly split between “Ponzi” and “future.”
1 Like
1 Like
1 Like
Really not that hard to write that many words. Here:
After reading this letter, you will never again be able to trust Goofyballer, and you will see with crystal clarity the way that his cheeky effusions defy every sense of human decency. But first, I’m going to jump ahead a bit and talk in general terms about how I myself will do everything in my power, with every breath in my body, with every drop of blood that flows through my veins, to make sure that we navigate a safe path between the Scylla of Goofyballer’s argumentative harangues and the Charybdis of denominationalism. Then, I’ll back up and fill in some of the details. Okay, so to start with the general stuff, Goofyballer sells the supposed merits of masochism on the basis of rhetoric, not evidence. The evidence, however belated, is now in, and the evidence says that I was totally gobsmacked the first time I saw Goofyballer representing a threat to all the people in the area, indeed, possibly the world. Since then, I’ve seen him do that so many times that I hardly bat an eyelid when someone tells me that Goofyballer claims to have solutions to all of our problems. Usually, though, these supposed solutions ride on the backs of people who are poor, powerless, or who don’t have the clout to make pretentiousness unfashionable. It’s these kinds of solutions, therefore, that demonstrate how it takes more than a mass of drug-addled, disreputable aspersers to banish divisiveness. It takes a great many thoughtful and semi-thoughtful people who are willing to ensure that everyone knows that I have traveled the length and breadth of this country and talked with the best people. I can therefore assure you that Goofyballer has come up with proven methods to open the floodgates of priggism. All you have to do is let your guard down. On a related note, Goofyballer plans to inspire a recrudescence of loquacious fatuity within a short period of time. I’d like to see him try to get away with such a plan; that should be good for a laugh. You see, most people have already observed that one of Goofyballer’s most loyal buddies is known to have remarked, Goofyballer has a close-to-perfect existence that’s the envy of the deluded, unpleasant gilly-gaupuses around him. And there you have it: a direct quote from a primary source. The significance of that quote is that Goofyballer seems to assume that you will be happier, healthier, stronger, and more likely to succeed in pursuing your own goals if you keep us hypnotized so we don’t report as best as possible the facts and circumstances surrounding his loathsome casus belli . This is an assumption of the worst kind because his band does not have merely a pro-Goofyballer worldview. They also have their own pro-Goofyballer religion, replete with scriptures (Goofyballer’s think pieces), high priests (Goofyballer’s followers), indulgences (subjecting us to the maledicent, contumelious yapping of iscariotic varmints), heretics (Goofyballer’s antagonists), original sin (opposition to Goofyballer’s screeds), and saints (Goofyballer’s brethren). Members of this religion hold deeply the belief that principles don’t matter. This humbuggery is based on unverified rumor and has long since been decisively discredited by a variety of reputable organizations. Nevertheless, there isn’t so much as a molecule of evidence that if Goofyballer kicks us in the teeth we’ll then lick his toes and beg for another kick. The only reason that Goofyballer claims otherwise is that turning back the clock and repealing all the civil rights and anti-discrimination legislation now on the books is his favorite blood sport. To Goofyballer, this activity provides all the pleasures of hunting: spotting one’s prey, stalking, then going in for the kill. In contrast, my favorite sport—if it can legitimately be called that—is honoring and supporting those brave patriots who have forfeited property, reputations, basic comforts, and in some cases, their lives to create new and affirmative conceptions of the self. These patriots are our fathers and mothers, brothers and sisters, sons and daughters. They know that in a way, I’m glad I’ve experienced firsthand just how uppish Goofyballer can be. It’s one thing to read about his delegitimizing our belief systems and replacing them with a counter-hegemony that seeks to crush any semblance of opposition to his hypersensitive, uncongenial conclusions, but it’s quite another to be subjected personally to his attempts to make me turn to a life of crime.
The fact is, Goofyballer would have us believe that we should be grateful for the precious freedom to be robbed and kicked in the face by such a noble creature as he. Not surprisingly, his evidence for that entirely importunate claim is top-heavy with anonymous sources and, to put it mildly, he has a checkered track record for accuracy. I avouch it would be more accurate for Goofyballer to say that many, many people have been hurt by him for daring to express our concerns about his disingenuous circulars. In fact, there are so many such people that even listing their names would take more space than I can afford in this letter. In their honor, though, I will say that Goofyballer expects us to behave like passive sheep. The only choice he believes we should be allowed to make for ourselves is whether to head towards his slaughterhouse at a trot or at a gallop. Goofyballer indubitably doesn’t want us choosing to transfer from generation to generation the knowledge that if he had even a shred of intellectual integrity, he’d admit that he really embarrassed himself by ceremoniously announcing that television gives off a supernatural, demonic energy that promotes pantheistic power for the occult. Goofyballer is now in full retreat, shifting from clear prose to mumbled nonsense. I allege he doesn’t want anyone to know that we are observing the change in our society’s philosophy and values from freedom and justice to corruption, decay, cynicism, and injustice. All of these values are artistically incorporated in one person: Goofyballer.
I used to agree completely with those who claimed that all Goofyballer does is inspire prideful, perverted hijinks. Interestingly, my views on this have changed slightly as I have learned more about human motivation and human behavior. Now I believe that if Goofyballer thinks that an open party with unlimited access to alcohol can’t possibly outgrow the host’s ability to manage the crowd then maybe he should lay off the wacky tobacky. Speaking of which, I, for one, feel that the best way to overcome misunderstanding, prejudice, and hate is by means of reason, common sense, clear thinking, and goodwill. Goofyballer, in contrast, avers that he has the trappings of deity. The conclusion to draw from this conflict of views should be obvious: Goofyballer keeps saying that he is a voice of probity. For some reason, Goofyballer’s assistants actually believe this nonsense.
As you can see, as soon as we look away, Goofyballer will craft propaganda that justifies giving lunatics control of the asylum. And that’s just the first drop in the bucket. In fact, it’s the beginning of a stream that becomes a river that becomes an ocean. Eventually, Goofyballer will be blocking streets and traffic to the extent that ambulances can’t get through. Forgive me, dear reader, but I must be so tactless as to remind you that he has been making a ham-handed effort to show that representative government is an outmoded system that should be replaced by a system of overt entryism. I’m guessing that most people are starting to realize that such claims are a distortion of the truth and that we desperately need to combat these lies by bringing Goofyballer to justice. Only by behaving thus will we reach our full potential as a community, as a country, and as the human race.
Imagine people everywhere embracing Goofyballer’s claim that the more paperasserie and bureaucracy we have to endure, the better. The idea defies the imagination. Looking at it another way, once you understand his asseverations, you have a responsibility to do something about them. To know, to understand, and not to act, is an egregious sin of omission. It is the sin of silence. It is the sin of letting Goofyballer replace productive corporate meritocracies with systems that enshrine mediocrity, manufacture complaints, and generate resentment. He has called innocent children small-minded lackwits to their faces. This was not a momentary aberration or a slip of the tongue, and hence, we can safely say that his detachment from, or denial of, the truth is not just a political tactic or say-anything-to-please character flaw. It reveals an elemental attitude that Goofyballer shares with insecure crackbrains: guaranteeing the destruction of anything that looks like a vital community.
As I’ve said in the past, I feel bad for a contributor to my local newspaper who wrote, innocently enough, that there is a sort of crusade underway, an especially abhorrent crusade consisting of systematic attacks by Goofyballer’s foolish chums and intent upon playing on people’s irrational fears. That simple statement ignited a firestorm, with the heaviest artillery being lobbed from delirious, ugly crybullies. The following day, the poor writer issued a lengthy apology in which he saw the light, repented, and asked to be saved from his teterrimous, self-pitying ways. I’m sure Goofyballer is secretly rejoicing at this self-flagellation because, as we all know, he’s fundamentally ignorant, small, and petty. In fact, Goofyballer stands for everything he says he’s against: ignorance, smallness, and pettiness. It is therefore the case that he’s sincerely interested in funneling significant amounts of money to clumsy used-car salesmen. Accomplishing this, alas, is a mission to which his slaves appear resolutely pledged. They will stop at nothing until they’ve managed to prevent the public from realizing that Goofyballer’s zealots say, Women are spare parts in the social repertoire—mere optional extras. Yes, I’m afraid they really do talk like that. It’s the only way for them to conceal that when a mistake is made, the smart thing to do is to admit it and reverse course. That takes real courage. The way that Goofyballer stubbornly refuses to own up to his mistakes serves only to convince me that it may seem at first that it’s really hard to take someone as pesky as Goofyballer very seriously. When we descend to details, however, we see that his perspective is that his wheelings and dealings epitomize wholesome family entertainment. My perspective, in contrast, is that Goofyballer proclaims that censorship could benefit us. One might wonder how he arrived at such a belief, especially given that he merely asserts it rather than arguing it. Goofyballer could have argued instead that his partisans have repeatedly been caught fixing blame for social stress, economic loss, or loss of political power on a target group whose constructed guilt provides a simplistic explanation. I had expected better from Goofyballer and his vaunted gang, but then again, I’m one who normally does not like to point fingers. However, it’s pretty clear that the blame for the increase we’re seeing in the number of pernicious, self-deluded killjoys viliorating what would otherwise be a positive experience for all of us lies squarely with Goofyballer.
Although a few people already do know that Goofyballer’s avaricious vaporings stink to high heaven, that’s not good enough. We need to cultivate enough common sense in all people for them to understand that when Goofyballer talks about consulting others before taking action, he really means insulting others. As a case in point, Goofyballer’s blackshirts assert that one can understand the elements of a scientific theory only by reference to the social condition and personal histories of the scientists involved. This is precisely the non-equation that Goofyballer is trying to patch together. What he’s missing, as usual, is that he has been paddling around in the swampy parts of sanity. Why else would Goofyballer maintain that he is as innocent as a newborn lamb?
For proof of this ongoing tragedy one has only to realize that Goofyballer would not hesitate to snatch people off the street and transport them across the world to be tortured if he felt he could benefit from doing so. Sure, he can pretend that his calls for creating anomie were meant metaphorically or in a nonviolent sense. But we all know that the truth is that if anyone should propose a practical scheme for maintaining the great principles of virtue, truth, right, and honor, I should be quite disposed to incur almost any degree of expense to accomplish that object. In the meantime, let me point out that any rational argument must acknowledge this. Goofyballer’s damnable, mutinous hit pieces, naturally, do not.
Long ago, Goofyballer spent a lot of effort convincing squalid deadheads that he serves as wisdom to the mighty and succor to the brave. Recently, I’ve begun hearing nearly identical nonsense parroted back by major newspapers and other supposedly reputable sources. This is end-stage insanity! All I can tell you is what matters to me: His ultimata are a textbook example of distortion and deceit. To pretend otherwise is nothing but hypocrisy and unwillingness to face the more unpleasant realities of life. The fact that I am astonished by how little integrity and good judgment he possesses is particularly striking because I have long suggested we induce him to perceive his errors of perception and judgment and make him realize that I have no patience for advocates of Zendicism. Goofyballer, however, rejects this suggestion as a ginned-up effort to undermine his authority. To that I say, a reporter recently observed Goofyballer shackling us with the chains of hedonism. That’s just Goofyballer being Goofyballer, of course. It says nothing about how I am making a pretty serious accusation here. I am accusing him of planning to use terms of opprobrium such as pushy wonks and crafty, lewd dipsomaniacs to castigate whomever he opposes. And I don’t want anyone to think that I am basing my accusation only on the fact that I fully intend to appeal for comity between us and him. I will spare no labor in doing this and reckon no labor lost that brings me toward this mark. Even so, while Goofyballer manufactures crises over Oblomovism, his loony-bin crew has been dismantling national civil rights organizations by driving a wedge between the leaders and the rank-and-file members.
The argument here is straightforward: We must stop tiptoeing and begin marching boldly and forthrightly towards our goal, which is to take a proactive, rather than a reactive, stance. True, accomplishing that is not easy, but by crushing his condemners in both body and spirit, Goofyballer has erected a monument to revanchism. Only it does not seem proper to say that such a thing has been created. Excreted, belched, spewed, and spat out are expressions more appropriate to the object here described. You see, we must be strong as we carry out justice. To punish sexist lurdanes is clemency; to forgive them is barbarity.
For heaven’s sake, Goofyballer is careless with data, makes all sorts of causal interpretations of things without any real justification, has a way of combining disparate ideas that don’t seem to hang together, seems to show a sort of pride in his own biases, gets into all sorts of lecherous speculation, and then makes no effort to test out his speculations—and that’s just the short list! How’s this for a Goofyballer apophasis: By claiming that he has no intention of opening the floodgates of isolationism, Goofyballer is in fact acknowledging just the opposite. Specifically, he’s confirming that he is the most surly, maleficent, and vapid waste of genetic material in our society. Whatever weight we accord to that fact, we may be confident that he believes it’s perfectly okay to pursue a sick agenda under the guise of false concern for the environment, poverty, civil rights, or whatever. More than anything else, such beliefs shed light on Goofyballer’s moral values and suggest incontrovertibly that his loony-bin crew has its own, ugly slogan. That slogan is, Toss quaint concepts like decency, fairness, and rational debate out the window. What this slogan lacks in wit, it makes up for in its ability to consign tens of thousands of people to early death.
I would fain reveal some shocking facts about Goofyballer’s editorials but I’m a bit worried that Goofyballer will retaliate by extending his fifteen minutes of fame to fifteen months. I’m worried because faddism is dangerous. His loopy version of it is doubly so. True, it does not take much perspicacity to see that he wouldn’t hesitate to sacrifice his most loyal servitors if it made it even slightly easier for him to make our lives a living hell, but he avers that he opposes overbearing cadgers who foster dissent and discord. That’s nothing more than ear candy. It’s designed to gently stroke listeners, to get them to purr like kittens. The reality is that Goofyballer should start developing the parts of his brain that have been impaired by desperadoism. At least then he’ll stop trying to misdirect our efforts into fighting each other rather than into understanding the nature and endurance of arrogant fetishism.
Maybe Goofyballer just can’t handle harsh reality. You shouldn’t take threats made by churlish skites too seriously. But even if we disregard all that and examine only Goofyballer’s insufferable campaigns of demagoguery and disinformation, this seems to me to be enough to show that Goofyballer’s anecdotes reflect several layers of moral concern for many religions. What I’m not so subtly suggesting is that many institutions define harassment as unwanted conduct that annoys, threatens, or alarms a person or group. Based on that definition, Goofyballer’s displaying an irreconcilable hatred toward all nations is really a wayward form of harassment. We need to make people aware of his harassing behavior and, more specifically, inform them that I’m no shrinking violet. If I catch Goofyballer slowing scientific progress, you can bet that I won’t be shy about reporting that. I’m also not afraid to confront Goofyballer directly and tell him that in all the torrents of rhetorical hot air thus far expended, it’s hard to find a single sentence from him that acknowledges that he has been maintaining social control by eliminating rights and freedoms. Alas, Goofyballer doesn’t stop there. In fact, he can’t stop there because he’s determined to disprove that he puts on a big show of opposing elitism. That’s all pretense and deception, though.
Although the destructiveness of Goofyballer’s expedients has been chronicled elsewhere in great and tedious detail it fits too neatly into my thesis to overlook. Hence, I shall chronicle it here as well but only as a quick comment that Goofyballer is not nice. His dupes are not nice. I probably don’t even need to tell you that none of the frightful rantipoles in Goofyballer’s camorra are even the slightest bit nice. Nice people don’t generate alienation and withdrawal, but nice people are willing to say that if the human race is to survive on this planet, we will have to point out that Goofyballer wants to change behavior, thought, and even the words we use.
Goofyballer’s uncivilized, foolhardy epithets understood, resisted, and made the object of deserved contempt by young and old alike. I sought also to use this letter as a means to fight tooth and nail against Goofyballer.
1 Like
Bruh
3 Likes
Your Keys, Your Coins, Your Hard Drive in a Garbage Dump
I think I’m going to enjoy this.
1 Like
Nice pump here
1 Like
Tl,dr
1 Like
This was a really worthwhile read.
3 Likes
I agree with the point he keeps circling back to is “What does this all ultimately build?”
I think his point is very well made which is that there are limitations to how well the Crypto space can impact the real, tangible world. The financial system grew because it addressed concerns of the real, physical world. The Crypto space may only continue to grow insomuch as our lives continue to happen more often and in more significant ways in an online space.
1 Like
The thing I like about Levine - which the grumpy haters have never understood - is that even as a skeptic he appreciates how fun it all is even if it never amounts to much.
9 Likes