I was in the middle of writing something about this when your post popped up. Auditing an entire blockchain seems like it would only make sense in the very early stages, or even just during development. By the time it hits mainstream use you have to figure there have been enough eyes on it to trust it works the way it’s supposed to.
There is so much stupid money in crypto that its profitable for the grifters to keep making ponzi coins since money will flow to it regardless.
So its profitable to continue making it until there is no more dumb money flowing to shit coins.
Yeah I dunno maybe don’t hold your breath on this one. When crypto fails, they will unceremoniously blame BIG GOVERNMENT because that is the first and only principle of the philosophy.
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I think the confusion stems from how you think we actually make money on nfts. It’s basically just trying to throw as many darts as possible at a dart board, we’re just better dart players than the average dart player. Still if I were to guess we’re the people you seem to feel sorry for in 90-95% of the cases. Because that’s probably the % of nfts that we’ve lost money on. We all have 100s or 1000s of nfts we paid a good chunk of change for, that are now worth exactly zero dollars. Why don’t you feel bad for us?
AFAIK none of us have ever intentionally bought a scam project to dump on someone else. Actually several people in discord have returned stolen nfts to their owners for cost just because they didnt want to make money from a scam. Part of the confusion is probably also stemming from every nft project that goes to zero is classified as a scam or a rug, but almost all of them it’s just because the interest in the project fell off a cliff and the price went to ~zero and after a few months the project owners just give up. Because why dedicate time or money to something that is never coming back to life. People are upset because they lost money so they call it a scam.
Small stakes venture capitalism.
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I would feel bad if i sold you something that went to zero, not sure why you think it’s a gotcha.
And if i sold something that turned out to be a scam (which is different than just going to zero for lack of interest) i’d feel worse.
while i suck at buying and selling nfts, confusion is not one of my strong suit. I’m pretty well versed in how you guys make money. This issue is part of the reason why i never found the nfts trading world interesting. My argument has to be really clear at this point. Wichita literaly wrote you made a bunch of money on a rugged project. I said thats a shitty thing to brag about. I stand behind that point even if you guys think its part of the game. If that project wasnt actually rugged or rugging it was part of the concept or whatever fine, then my point stands to anyone else who brags about it in a project that actually got rugged.
fwiw, it did finally click with me where my issues with the nft discord comes from. it has an ironic twist to it in a way.
almost everyone on the discord have nearly identical views to RM and friends. only they made/make money of nfts so they view it as a funny and lucrative experience navigating the waters of the scam/bubbles/rugs. while my view on nfts is probably way closer to that of Beetlejuice, which is ironic for what should be obvious reasons.
clearly if you hold the views that nfts are a stupid game of musical chairs with no value whatsoever to anyone and everyone involved think the same, then losing the pump n dump is just part of the game and who cares ‘theyd lose their money anyway might as well be me’ etc etc.
I should make a graph of rich/poor beetlejuice/riverman and place everyone in it to demonstrate my point but i’m too lazy.
Have any of you guys actually lost money overall on crypto? This seems kind of like sophistry.
This is actually totally backwards. There is no economic capital anywhere in the entire crypto ecosystem. No actually productive work is happening. There’s no factories, no people being employed at useful tasks. Crypto is actually the perfect form of finance, not capitalism. I’m not sure to what extent, but I think the SEC actually contributed to this by cracking down on the early FileCoin-era ICOs. The issue is that if you’re raising capital to finance real investment,
youre clearly selling securities, which is basically impossible to do legally with crypto. So the whole enterprise inherently depends on its disconnection from capital.
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I have, and have been pretty open about it. I put some money in, happened to catch the peak (as I always do–my record as a top signal is unprecedented), and am down in both ETH and in USD, meaning my losses aren’t just due to ETH losing value vs the dollar.
Interestingly, I went through my transaction history recently and found that most of my plays have been winning plays, including several I didn’t remember, but I’ve taken a bath on my two biggest gambles which is why I’m down overall. The first was a noob mistake that I should not have gone so deeply into, but I got caught up in the hype and didn’t know better. I think that one was a clear mistake and cost me ~3 ETH. The second was a good idea executed incompetently, but most of us still think it was a good bet at the time given the information we had. We essentially just caught a bad runout on that one. That’s also responsible for ~3 ETH in losses. I put ~7.5 ETH into this venture, so tanking 6 ETH on two projects is preeetty hard to recover from (and is lolbad bankroll management).
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This is very helpful, as I hadn’t really understood the distinction. It’s the smart contracts that would need to be audited, because those smart contracts are what determine how the individual tokens are transferred?
And, now that I’ve read a little bit more, I’m pretty sure an auditor could never assess the likelihood of a rug pull, because that’s just the founders selling off their holdings, right?
The thing that I don’t understand is this comment, from a reddit thread:
Another example is Safemoon, where the Certik Audit passed it, but found an exploit in the SwapandLiquify functionality which could enable a funds to be siphoned from the liquidity pool. Another audit, performed by Doxxlocker confirmed that a small percentage of tokens from each transaction is passed through into a non-disclosed wallet, then sold off-chain after being wash traded.
So while the Certik Audit said “All good apart from X, Y and Z” the reality is, someone at Safemoon was siphoning funds out of the liquidity pool and selling them.
I don’t know if you’re familiar with Safemoon (I’ve never heard of it). But it seems like this could be interpreted in two different ways:
- There is a weakness in the protocols that could allow a hacker to siphon funds from the liquidity pool.
- There is, objectively, an intentional execution in the code that sends some percentage of tokens to a non-disclosed wallet.
Do you have a sense for which one of these is more likely?
Many thanks for helping me look smart.
Edit: More generally, I’m expected to offer a skeptical view of these audits, and whether investors in a particular coin would find the audit useful. Is this a fair summary:
- Audits can provide assurance that the smart contracts function as described, and that there are no exploitable provisions that could lead to the theft of coins/funds.
- It’s not clear how much the value of a particular coin is driven by the stability/safety of its smart contracts. The audit doesn’t provide any assurance that the developers will continue to support the project, rather than selling all of their tokens into an illiquid market. If investors care about the likelihood of losing money, the audit probably isn’t going to identify the events most likely to lose money.
Maybe. In general I think it’s used to represent the founders promising something and instead walking away, pulling the rug out from under their “investors” (for lack of a better term). In NFT-land, the founders don’t even have to sell off their holdings, they can just take the money given to them by mint proceeds (what people paid to mint the tokens) and royalties (a % they get from every sale on secondary) and just walk away. That leads to other adjacent terms like “soft rug” that refers to a project team not literally walking away but just doing the bare minimum so they can claim they tried.
There are things that make rug pulls less likely, like a doxxed team where everyone knows the IRL names of the project team, so maybe that could be included as part of an auditor’s assessment, but even that isn’t a guarantee. The first project I mentioned in my post above is called Humans Of The Metaverse, and they’ve essentially soft-rugged despite having a fully doxxed team.
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AIUI, a rug pull is a little different. The founders aren’t just dumping their holdings in secondary sales, they can effectively redeem their holdings by taking the crypto assets that were put into the protocol by investors. It’s as if I form a start-up, get a VC fund to put $1 million in in exchange for 50% of the stock, then I redeem my 50% of the shares for $1 million, leaving the VC fund with 100% ownership of a shell. There’s an obvious technical solution of just not letting the founders redeem their tokens, at least not immediately.
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Me too. It’s a combination of being a bit too late to the game and being unwilling to put in the day-to-day work of keeping up with everything required to identify and take advantage of good opportunities. Plus some bad luck and bad timing.
I had no illusions about the risk and no complaints. It’s been a lot of fun.
Also I’ve long been of the opinion that the real money, obviously, is on the creative/dev side of things. So I’ve been learning as much as possible on the technical side, and getting involved in the art side including producing my own generative art collections. This is much more interesting to me than actually trying to trade NFTs, which, again, I suck at.
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I actually think your views on the discord people are mostlywrong. I think most of us believe almost everything will go to zero, but that the ones that make it will be worth a lot of money. Kind of like any market in its early stages. I myself have bought a handful that I intend to keep longer term as an investment and many others have done the same.
I don’t see anyone having the same views as RM and the rest. I think most of us see it as any other financial market. Just a very volatile one. RM and the rest for some reason seem think that investing in stocks or real estate or whatever is a more noble way to park your money. Which is probably a big reason for this thread going sideways.
How would a few increase in value if you believe that most everything will go to zero?
If anybody is keeping score, I am also currently underwater as of the May dumpening. I don’t really do the NFT’s, although I do have some. Most of my holdings are in alt L1’s, L2’s, and similar high volatility projects that got rekt even harder than the big boys.
This might be a dumb question, but do all of these coins have some associated pool of funds like bob describes here? I assumed that was only true for stablecoins(?), but I really have no idea.
