Quote:
Originally Posted by DontBanMePlz
not defending coinflex or doug here, feel like they are probably both more at fault that they are letting on but i don't think the trust but not verify applies here.
the way these products work are complex and every exchange that offers them are at risk of margin funding to be under collateralized. poloniex, bitmex, okex, etc all have had similar issues in the past despite being much larger and more liquid exchanges. the problem is, during extreme market moves, positions like these aren't liquidated in time or the book liquidity isn't there in order to recover the collateral for margin lenders. I assume this was one of the cases where the position was so large vs. the book liquidity that it would have wiped out lenders and the bch book at the same time if it was forced to market close. Instead they kept it open in negative assuming that roger would eventually top up margin as he agreed to, which is pretty poor risk management not to at least start partially liquidating the position. without a doubt the position was opened fully collateralized but assets are volatile and issues cascade when (this is just speculation) there is a long on bch using bch as collateral on the position. I don't think this situation is as simple as, they lied about the site collateral, and there is a severe lack of understanding by everyone posting here about the actual issues at hand.
i think trust but verify absolutely applies here, especially factoring your speculation hypothetical.
exchanges like coinflex can make a statement that is *factually correct* at the time for doug, but involve underlying weaknesses that blow them the **** out when real volatility actually happens. on a long enough timeframe "real volatility" is a certainty to happen and not building that safety measure is tantamount to suicide. letting daddy roger build up a big enough balance to make them pause withdrawals is an unforgivable failure. to make doug out like he's 100% innocent by strict virtue of not knowing the deep workings of the tail risk that led to failure, I just don't buy.
to say trust but verify doesn't apply here, to me, infers that on some level this was just bad luck and it can happen to anyone. that is chicken *****. i don't want to build out some kind of strawman so i won't go further, but it seems to me coinflex doesn't know what they're doing and Doug didn't do enough homework to stake his reputation on telling his followers to throw their money at a DeCeFi with garbage risk management protocols.
Quote:
Originally Posted by DontBanMePlz
the flexusd product is fine is the point its just tied to an exchange that is now partially illiquid is the issue. everyone should be taking issue with the exchange operations side and not the stablecoin side of the matter.
i'm pretty sure most people are taking issue with the exchange and with doug, getting overly sensitive on flexUSD being labeled a scam by noobs is a weird hill to die on. especially with rvUSD existing.
Last edited by Clayton; 07-03-2022 at 12:20 AM.