Bitcoiners HATE DeFi \ stacker news ~bitcoin

23 sats \ 12 comments \ @JakeBlockchain 21 Mar bitcoin outlawed

Many Bitcoiners hate DeFi. They quote hacks and scams as the reason. When you dig deeper, they name 1 of 2 things.

The big 3 centralized failures of BlockFi, Celcius, and FTX. Or the total $ amount of hacks in crypto.

The former is corporate companies, not DeFi. The latter doesn't separate altcoins from BTC.

So I did my proof-of-work to get these numbers as we go into Bitcoin DeFi summer 2024.

The Stats: In 2023, $1.1 billion was lost to DeFi hacks. This number is down 60% year-over-year. This could be due to bear market slowness or smart contract security getting better. 🤷‍♂️

How much of that $1.1 billion was BTC? 11% A total of $112 million BTC was lost over 5 exploits.

These topics are very nuanced. For example, BTC as a ratio to other tokens has been a very small percentage of DeFi. Most of the BTC in these protocols is in more robust protocols like Aave (holds $2b BTC today)

I only present this information as a counter-weight to the Twitterati who present this in black-and-white terms, and to establish a base stat to build from as Bitcoin-centered DeFi becomes more prominent.

Do with this information as you wish.

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131 sats \ 3 replies \ @nerd2ninja 21 Mar

Okay, with your gaps in understanding the argument presented, I add to your understanding the fact that "Decentralized Finance" is in fact decentralized in name only and that shitcoins themselves act much more as a company coin that you spend at the company store, a model people have experienced in the past to a great deal of misery.

Take your precious Aave for example. You have an unregistered company (they prefer to call themselves DAO), which votes using unregistered company stock (the aave token) which at the end of the day are suggestions that must be upheld by the people who run the github.

There is no concept of alternative clients, there no ability to rebel. With that by itself, how can you claim decentralization?

And for what? With all of that, assuming it all works perfectly, how much do those votes actually matter? Have you ever thought about how they're able to get Bitcoin in Aave? Why its WBTC of course. Isn't WBTC great wonderful and decentralized?

"Wait, how does WBTC work?" you might ask if you were sober instead of shitcoining. Why it works via a multi-sig and the organization that holds the keys to move this money is called a DAO wow dao so decentralized except for the fact that YOU the person with the WBTC are NOT one of the key holders so WTF is up with that and how are we calling a company holding our money for us "decentralized"?

I mean fuck, that would be like calling liquid decentralized....Except you shitcoiners would unironically call liquid decentralized wouldn't you?

Fuck going into the weeds on blow smoke up your ass technology. You think most Bitcoiners not knowing all of this detail means Bitcoiners are dumb and don't know what they're talking about, but its called a bullshit filter.

We will fight tooth and nail to ensure so called "Bitcoin centered DeFi" does not come to fruition. We will fight tooth and nail to separate "crypto" from any meaning or association with Bitcoin. We are not you. You do not belong here scammer. Get lost.

0 sats \ 2 replies \ @JakeBlockchain OP 26 Mar

Not going anywhere statist.

0 sats \ 1 reply \ @nerd2ninja 26 Mar

Nothing statist about social stigma against scammers

0 sats \ 0 replies \ @JakeBlockchain OP 30 Mar

Constantly calling out unregistered securities sounds like big government to me.

31 sats \ 4 replies \ @TheBTCManual 21 Mar

My question is what is the DEFI for? Why would a Bitcoin holder want it?

Apart from trying to access stablecoins without selling your Bitcoin and having liquidity pools for AMMs to swap between stablecoins of a different breed IE USDC to USDT or maybe Bitcoin, what is the real function?

The DEFI space is there to sell the dream of netting transaction fees, from traders, which often isn't that much, as on-chain validators take most of it, and to farm token inflation to try and keep pace with the tokens you're holding devaluing against Bitcoin

Those centralised companies that failed took a large part of their treasuries and aped it directly or via 3AC into defi ponzis like Luna, which blew a hole in the balance sheet. Celsius also had tonnes of capital locked up in various liquidity pools on UNI and farming some really shit shitcoins during DEFI summer desperately trying to earn a yield but it never materialised

DEFI smart contracts have to be deployed by someone, they have to be maintained, upgraded, monitored, they're not some sentient program, they are not some AI, they're just a different way of deploying what you would have otherwise done on your centralised engine hosted on your own server, offering a little bit more transparency

Is there a place for Automatic market makers? Sure, but I don't see it becoming more than a niche use

10 sats \ 3 replies \ @JakeBlockchain OP 26 Mar

I'd love to take loans in a trust-minized way and not have to sell/spend my BTC to realize its benefit.

120 sats \ 0 replies \ @TheBTCManual 30 Mar

Any loan requires a counterparty, or several and that requires trust, you will have to decide for yourself how much that risk is worth, lets play this out

You could go fully collateralised on-chain P2P with a service like hodlhodl, but liquidity is not great so you have to limit your size or take out multiple loans and try to balance your LTV and interest rates in a range you can comfortably sustain over the repayment period (still trusting the stablecoin issuer IE tether)

A step above that could be doing it on a side-chain like Liquid or Rootstock, again liquidity is even less and you're using a layer with different trade-offs to the basechain, IE you still have to peg out later

Then theres the CEFI route, you pick a company lets say its LEDN or Unchained and you work with them, if anything goes wrong you have a multi-sig key to recover and you have someone to sue for breaking your contract terms

Then theres the wrapped Bitcoin, smart contract bridge altcoin DEFI where you're trusting

the wrapped custodian wallet/smart contract bridge+ off-chain oracle
the smart contract/AMM/Indexer
The cloud provider/servers hosting the nodes
The wallet provider IE metamask/Infura backend
the chain validators
the stablecoin issuer
You also risk bots washing you out of your position because they're looking for loans that can be liquidated since all this data is public

While you might think you're getting a good deal on interest rates versus the other options, you have to factor in MEV, paying all the gas fees to lock in the deal and for all your repayment transactions

Like Nerd says, DEFI its trust maximised

1 sat \ 1 reply \ @nerd2ninja 27 Mar

Then don't use DeFi. You're involving MORE trust and MORE risk NOT LESS. It is not trust minimized it is in fact trust maximized. It has more individual people who can pull the rug along the chain of trust.

I've commented on another post of yours. One where you reveal that you bought into lie sold by scammers that maxis are just maxis because of the blocksize wars. I can't speak for everyone, but the Maxis I know are BORN FROM BEING SCAMMED. Maxis were born from ICO scams, even more Maxis were born from DeFi scams, for some Maxis all it took was taking a look around and realizing nobody is taking any of this seriously, but Bitcoiners.

You're not going to understand Maxis because you don't even respect why we get so angry at people pushing scams in the first place. There are moments when I have to look at a nym on the internet and I have to ask myself if the person I'm talking to knows better and is trying to scam or doesn't know better and is just parroting the words of some other scammer.

For you, I want to say you're just stupidly naive. You think what you're looking at is technical reality and you're too pompous to recognize how the technical aspects interface with the social. You think servers just run code their supposed to run and everyone follows the rules that are set out in your rulebook. You don't have a hacker mindset. You fail to think adversarially. I can be naive myself sometimes. I can think people are mistaken rather than malicious.

0 sats \ 0 replies \ @JakeBlockchain OP 30 Mar

You can just say you don't understand how DeFi works.

0 sats \ 1 reply \ @TNStacker 22 Mar

bitcoiners hate 💩🪙ers!

21 sats \ 0 replies \ @JakeBlockchain OP 26 Mar

That's a fact.

0 sats \ 0 replies \ @StillStackinAfterAllTheseYears 21 Mar

Checking out the Defi section on crypto critic Molly White's Web 3 is Going Great site definitely shows that scams and hacks are still pretty active, fwiw.