On the supposed “nihilism” of the Mango Markets arbitrageur

There will never be enough "adversarial hardening". It will never be possible for people to verify that their Lego blocks of finance are actually robust. The only thing that will create trust is time elapsed without an exploit, but that means that the only thing trustworthy will be the oldest, most ossified pieces. But as soon as you start composing those pieces with anything custom, you're back in danger. Welcome to the dark forest.

This post doesn’t so much refute the idea that the mango markets manipulation is nihilistic as confirm it.<p>I personally am fine with a strict view of these cryptos where the code is law. But it is a very paired down vision compared to existing systems and thus the “nihilism” label.

For crypto, I think it has to be &quot;code as law&quot;. Otherwise, what is the point. People will be better off depositing their funds in a brokerage and trading that way. Trading and settlement have to be merged to get the benefits from the crypto approact to money.<p>I think the next step for smart contracts is to port risk engines (for leveraged trading) and treasury risk management into smart contracts. But I think there is little overlap between people who write risk engines (almost never open source) and people who write smart contracts with slick UIs, so I don&#x27;t see this happening.<p>I think SBF (see <a href="https:&#x2F;&#x2F;twitter.com&#x2F;SBF_FTX&#x2F;status&#x2F;1580170203664904195?s=20&amp;t=_G6ox4t9X_JYEX56EfYYew" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;SBF_FTX&#x2F;status&#x2F;1580170203664904195?s=20&amp;...</a>) of FTX, who knows how leveraged trading works, explained what risk controls FTX implements.<p>A simple risk control would be to have a single transaction rate limited in funds it can suck out of an account.

&gt; one of the advantages of cryptocurrencies as the foundation of a separate financial system is that systems are, by necessity, subject to adversarial hardening<p>This is what the law is for.<p>&gt; Perhaps it is true that Avraham committed illegal market manipulation (or some other violation of the law). However, does it really make sense to call for prosecution and imprisonment?<p>Yes. They broke the law. Laws should be fairly enforced.<p>&gt; Furthermore, if there is any core ethos of crypto, it is one of independence from the authority of the state.<p>No, that&#x27;s the core ethos of a lot of people in cryptocurrencies. It turns out that there are a lot of &quot;investors&quot; in cryptocurrencies who do not feel that way :)

Avraham clearly is not skilled in public relations. Perhaps there is an element of nihilism, not in his wallets actions but in his willingness to surrender to the mob.

&gt; Illegality of market manipulation. Perhaps it is true that Avraham committed illegal market manipulation (or some other violation of the law).... Let us remember that Mango Markets is an unlicensed derivatives exchange run by a team of US citizens who also held an ICO for their protocol token, which likely qualifies as an illegal security ー do we really want to be tallying up legal infractions in this situation?... Almost everything in decentralized finance is illegal on multiple levels and we are all operating on very shaky ground here.<p>What a absolutely <i>stupid</i> argument.<p>Mango Markets ICO didn&#x27;t allow US citizens to buy tokens, so it wouldn&#x27;t be regulated as a security - so it is legal. But even so it&#x27;s pretty easy to argue that the security itself should be legal if certain education requirements about risk are met.<p>That&#x27;s a very different class of offense to bald market manipulation for profit.<p>&gt; Furthermore, if there is any core ethos of crypto, it is one of independence from the authority of the state.<p>So this piece argues. Personally, I&#x27;m all for regulation of financial markets - as someone on HN mentioned &quot;crypto seems to be speedrunning the history of financial regulation&quot;.

I agree 100%, those of us that embrace the crypto markets wanted a wild west. you don&#x27;t get to have a wild west only on the upswing and go crying for stability when the bullets start flying in the street. Either you want it or you don&#x27;t, if you don&#x27;t go buy google stock or something.

&gt; In my view, one of the advantages of cryptocurrencies as the foundation of a separate financial system is that systems are, by necessity, subject to adversarial hardening. In this interpretation, Avraham’s actions act to strengthen the system in the long run.<p>The language of &quot;adversarial hardening&quot; is torturous, and amounts to a tacit admission of failure: that cryptocurrency somehow <i>needs</i> to go through a process of making every single mistake that traditional finance has made and corrected for.<p>The necessity of this repeated rake-to-face process is not elaborated or further justified.