Don't get too carried away by semantics. A smart contract is just a piece of software, never forget that. There is nothing inherently "smart" about it, a smart contract is as "smart" as the programmer who created it and software being software you can ALWAYS count on bugs and implementation errors. Just remember Avraham Eisemberg (and countless like him) that have used the DeFi protocols as designed (not hacking, not tampering, not cheating, just using them) and being able to steal hundreds of millions of dollars: https://www.justice.gov/archives/opa/pr/man-convicted-110m-cryptocurrency-scheme The sad part of that story in particular is that Mango Markets (the DeFi guys) had to go crying to the good ole American Justice System, because their smart contracts failed them. So much for the "smart contract is the law" rallying cry of the crypto faithful. Don't get me wrong, I like financial innovation as anyone else here. But I don't fall for the hype and group thinking that is so prevalent in crypto land.
I completely agree that a contract with bad code is a disaster. But at least there is a sense of a repeatable and expected outcome if the code is written well enough. When you put humans in charge, you are at the mercy of corruption and supposed rules applied unjustly. Bitcoin is also essentially one big smart contract. After 16 years of being out there and attacked from every angle, it seems to be robust enough at this point, with already having gone through tweaks to make it so. So your point about bad code is valid, and hence I bring up bitcoin to show that if the code goes through years of being out there, with anyone free to exploit it for personal gain, this is the best way to create the best code.
There is a reason AAVE and Venus and all the ones with TVL in the 10's of billions of $ do not accept their tokens as collateral or any tokens with no proven market value, a robust trading markets, liquidity depth in the billions of $ The Mango hack is the same concept hack as FTT tokens, SBF used FTT tokens and said hey everyone, let me borrow billions of $ and use these FTT tokens FTX exchange issued as collateral? Look at what AAVE accepts as collateral and then you'll understand why it has a borrow and lending market worth $50 Billion across multiple blockchains but to acknowledge your point, there is always a smart contract risk in any crypto DeFi platform But my point which got mixed up on the risks is that financial rules on crypto defi, are strict and rigid, your collateral ratio crosses a threshold you get liquidated unless you add more collateral or pay off some or all of the loan This did not happen in TradFi as FTX, Voyager, Celsius, Genesis, BlockFi all filed bankruptcy protection
Maybe you can't compare similar crypto exchanges but I can. FTX and Bitget: - Offshore unregulated crypto exchanges - Offer trading in highly leveraged derivates - Heavy emphasis on sponsoring sports icons and influencers Bitget hasn't been hacked yet.. It will happen sooner or later that seems to be the reason for Bitget's Protection Fund. Seems they are getting ready for some "Platform incidents" that could result in over half a billion dollars in user losses. I wonder what kind of event they could be anticipating? Hopefully the fund is large enough I'm glad you enjoy staking your meme coins and participating in those markets but don't be intentionally ignorant and tell yourself "This time its different" when everything seems eerily similar to the previous cycles. If it walks like a duck and quacks like a duck...
You're almost there. If you were actually acquiring a stake in a real business with real income and thereby generating "passive income" it would be regulated by the SEC as a security. Whenever someone has to invent special terms, it's a giant red flag that you're the "pigeon". Imagine a bank where all deposits were denominated in shares of the bank. And the only loans it made were to buy shares of itself or other similar banks. And the bank is unregulated and uninsured. Sounds like an exciting opportunity right?
I don’t follow your analogy but it sounds like a scam. but, being pedantic here, you can buy stakes in real businesses without the SEC involved (the whole PE and VC industry) and real estate developers give special incentives to the first people buying condos in a new development all the time. It’s standard practice in NYC.
There's a lot of things you said here that is simply not true AAVE or any crypto bank do not denominate any of the crypto assets in "shares" of the company, each and every crypto asset is valued in fiat terms, i.e. USD or Euro, at the time of sale There is competitive advantage due to jurisdictional arbitrage that exists in web3 geographical independence Technology is causing all kinds of disruptions Meta (Facebook)/Instagram, has been able to monetize the content and pictures and stories of over 3 Billion users worldwide, but they do not give any of it back to its users only to its shareholders OnlyFans shares the monetary incentives with its "partners" content creators and as a result is the most profitable company per employee in the world.... except Tether says "hold my beer"
Looked into pancakeswap. You can add a memecoin to a liquidity pool, get a LP token, farm the LP token to get CAKE token, stake CAKE back to pancakeswap. Might be missing a lot but appears easy money. I'm all in.