/biz/ - Business & Finance

>>52530218
>their holders
meant to say users.

>>52530218
what does proof of reserves have to do with the luna collapse? the trust us promise was code already in the case of luna - the network and tokenomics acted exactly as programmed

as for FTX and Celsius, it is in their best interests to not show proof of reserves. no tradfi institution as of the last couple decades has maintained 1-1 reserves because it would cost so much to maintain. partial reserves are far more efficient, and some of these cost benefits flow to the user in the form of lower fees and free signup etc.

you are yet another brainless clueless link drone. you need to get smart asap

>>52530218
Most of them are bad actors looking for a profit and the cattle will glady place their money with them and then sniffle and howl for regulation after they get rekt

>>52530299
this is why we need regulation

PoR is useless without Proof of Liabilities, and that cannot be enforced on chain with companies with real world assets.

Sergey is shouting a complete misnomer into the void. Seethe and cope

>>52530248
>no tradfi institution as of the last couple decades has maintained 1-1 reserves because it would cost so much to maintain. partial reserves are far more efficient, and some of these cost benefits flow to the user in the form of lower fees and free signup etc.
the entire point of defi having any appeal at all is that tradfi sucks enormous dick because of this

>>52530310
this. proof of reserves tells nothing of the entire financial position or solvency of a firm. sergey would know this if he knew anything about how to run a firm, but he doesnt. another clueless codemonkey who is way outside his depth. id be surprised if he has looked at a balance sheet once in his life

>>52530306
Do it, and pump xmr chads' bags

>>52530319
some aspects of defi do this brilliantly, others ride the hype train of a new financial system straight into a pit of shit.

truth is, maybe 1% of crypto users who have interacted with defi know what they should be doing, the risks attached, and the "type" of defi they are dealing with.

>>52530248
>what does proof of reserves have to do with the luna collapse?
The whole thing was supposedly backed by reserves. See pic.
But there was no proof of reserve.

>as for FTX and Celsius, it is in their best interests to not show proof of reserves
It's not in the interest of their users, who should've been voting with their money.

>no tradfi institution as of the last couple decades has maintained 1-1 reserves because it would cost so much to maintain
Tradfi institutions are legally obligated to disclose their reserves.

>>52530310
>>52530320
>PoR is useless without Proof of Liabilities
It's extremely useful even without proof of liabilities.
Plus, an exchange's reserves are meant to cover customer funds, which should make up 90+% of their liabilities.

>>52530361
as far as i know there was no code tied to those reserves that would sell them when appropriate, therefor the reserves were not backing luna whatsoever and were completely irrelevant

no its not in the interest of FTX and celsius users, but its also not a requirement, or was the standard practice for other exchanges prior to the FTX collapse. it is also very uncommon for tradfi institutions to hold reserves 1-1, and those businesses in the tradfi space generally have reporting requirements for financials anyway.

some tradfi institutions are obliged to disclose their reserves, and to meet minimum capital requirements. these minimum requirements, in almost all cases, are not 1-1

>>52530367
>meant to
>should make up
you run an exchange? kek. you seriously underestimate the complexity and purpose of an exchange from the board of directors point of view. there is a lot lot lot more going on in the financials of an institution as large as an exchange that has nothing to do with the client facing service they offer

>>52530310
>>52530320
Lmao, FTX held no BTC at all.
If they had PoR people would’ve instantly noticed and it would’ve never gotten so bad.

>>52530392
if you go by this logic you would be left extremely confused by the reserves held at any normal time by your favorite exchange. proof of reserves for only crypto assets? this tells no story..... if you're deciding whether a firm is solvent or insolvent based on crypto asset reserves alone you are blind to 95% of the rest of the business

>>52530218
>>52530224
samefag

>>52530361
>Tradfi institutions are legally obligated to disclose their reserves.

Not sure how true that is.

this guy is completely shut out and I almost feel bad for him at this point. Nobody cares about their solution or chainlink in general, cz sets the agenda. It's pathetic to see him shout look at me look at our product from way in the back.

>>52530376
>as far as i know there was no code tied to those reserves
There were no actual reseres tied to those reserves lol

>were completely irrelevant
lol those reserves were a massive part of Luna's presence in the market.
Pic very related.

>no its not in the interest of FTX and celsius users
Of course it is.
With proof of reserve, everyone would've been able to objectively verify just how fucked those exchanges were.

>>52530387
We know from looking at the balance sheets of Kraken, Coinbase, ... that 90+% of their balance sheets are customer funds.
And even if they have liabilities that ultimately cause them to go bankrupt, proving they actually hold all the customer funds means they can pay back everyone even if they do go under.

>>52530630
no, thats what im saying... the crypto asset reserves of an exchange at some specific time do not reflect the health or outlook of an exchange as it makes up a small part of their entire financials.

go to college and study finance at the very least, midwit

>>52530452
Look up "regulatory reporting".

>>52530640
>crypto asset reserves of an exchange makes up a small part of their entire financials.
90+%, actually.
And even if they have liabilities that ultimately cause them to go bankrupt, proving they actually hold all the customer funds means they can pay back everyone even if they do go under.

>>52530678
You're forgetting that some of their other liabilities could take preference over customer deposits, therefore customers would only get a % of their deposit back since those other liabilities would be repaid first in a bankruptcy situation

>>52530218
At this point everything sergey says just sounds like naive bullshit to me
>imagine if we just had free energy, how much better everything would be
Like yeah, in fantasy world that sounds great. Who's doing it? Chainlink? They don't have shit after 5 years and are out of steam. Sergey just makes these grandiose statements with barely any connection to the real world.

>>52530785
That's a decision potential customers can weigh based on the numbers exchanges disclose.
There are tons of things exchanges can do to provide guarantees, like Binance's Safu fund.

>>52530793
>proof of reserve
>naive bullshit
Tell it to literally everyone suddenly talking about it now.

>>52530818
Nobody with any sway will adopt chainlink because it dissolves their power to print free money

>>52530414
>you would be left extremely confused by the reserves held at any normal time by your favorite exchange.
My favorite exchange is Kraken, and they’ve been proving their reserves for years now.
They could still go belly up, but at least I know their shit isn’t nearly as fucked as FTX’s.

>>52530793
>Who's doing it? Chainlink?
Chainlink has been providing it for years.
And now after FTX everyone and their dog is moving towards PoR, like Binance.

>>52530818
Interesting, so not only do you need the exchange to provide full disclosure over its balance sheet, you're also asking them to disclose the terms underlying all their liabilities so customers can then determine which liabilities would take preference over their deposits.

>>52530818
Also, who's talking about it aside from us and sergey? Nobody even knows about PoR

>>52530873
They'll have no choice if that's what the market demands.

>>52530877
No, I'm saying proving reserves goes a long way.

>>52530885
>who's talking about it aside from us and sergey? Nobody even knows about PoR
Tell me you're joking. Everyone's talking about it right now.

>>52530426
Bot or newfag

>>52530903
But how? You just said that customers could make decisions based on the numbers the exchange releases, but how can a customer make an informed decision about the solvency of an exchange if they don't know the full extent of non-crypto liabilities and whether those liabilities take precedence over their deposits or not? Sounds like you're asking customers to trust the exchange that they don't have lots of secured liabilities tucked away that they're not disclosing

>>52530903
>Everyone's talking about it right now.
Maybe but link won't have a working product until sometime next year which is enough time for everyone to completely forget ftx

>>52530956
>how can a customer make an informed decision about the solvency of an exchange if they don't know the full extent of non-crypto liabilities
If the exchange can prove it has all of the customer funds covered 1-to-1, that instantly makes this exchange more desirable than exchanges who don't prove anything or who prove insufficient coverage.
Obviously

>>52530962
>link won't have a working product until sometime next year
Link has had a working product since May 2019, and working proof of reserves since not long after.

>>52530972
And yet here we are at 2019 price levels. Chainlink is all talk, they have nothing to show for it.

>>52530991
>Chainlink is all talk, they have nothing to show for it.
Chainlink has had working proof of reserve for years. And they completely own Defi and the oracle market.

>>52530998
So why is it not reflected in the price?

>>52531011
You tell me.

>>52530972
But that's not true
>Exchange A is in trouble but has a 1 to 1 customer deposit backing as well as additional secured debt worth 50% of its crypto liabilities. It goes bust and repays customers 50% of their deposits since the secured debt takes preference
>Exchange B is also in trouble and only has 90% of customer deposit backing, but they have no additional secured debt. Customers receive 90% of their deposit back
In your mind, Exchange A is the better outcome since it has 1 to 1 backing, yet customers only receive 50% of the deposit back vs 90% from Exchange B

>>52531021
Because they are all talk and don't have shit. Just like they were pleased to announce staking this year and then we get v0.1 in december after being down like 80% since that announcement.

>>52531022
There's no way in hell an exchange has 50% of its user deposits in debt unless they're moving user deposits to places where they don't belong (e.g. funneling them off to a separate investment firm like FTX did with Alameda). Which proof of reserve would instantly bring to light.

>>52531043
>they are all talk and don't have shit
They completely own the Defi and oracle space.

>>52530218
>why would a scammer want people to identify their scam
lol

>>52531050
>They completely own the Defi and oracle space
And yet the price has been down month after month for like 18 months. It's all talk and that's demonstrably true. Verifiable, you might say.

>>52531068
Because their users demand it.

>>52531076
>And yet the price has been down
That doesn't change the fact that Chainlink completely own the Defi and oracle space.
It's the most adopted crypto in the world, maybe after ETH although even that's debatable.

>>52531090
So where is the positive price action to reflect this? Even at the height of the defi bullrun last year link was shitting itself. How do you reconcile this fact? Unless link has the price movement to reflect it, what does it even matter if they own defi or not

>>52531050
The %'s are just for example purposes, but you misunderstand. I said they have secured debt worth 50% of their customer deposits. Let me make it easier for you:
>Exchange A has 100m of customer deposits on hand, which is exactly equal to 100m of their customer liabilities. However, they have 50m of secured debt which is not disclosed in a Proof of Reserves calculation. That debt reaches maturity, and the exchange has 2 options. Option 1, they repay the debt using customer deposits which then shows up on their PoR, or Option 2, they file for bankruptcy and since the debt is secured it gets repaid first anyway since it takes precedence over unsecured customer liabilities. So in both options, customers will only receive 50% of their deposit back

>>52531146
>So where is the positive price action to reflect this?
You tell me.

>>52531149
If an exchange has 100% customer deposit backing, it's very hard for them to rake in enough debt to fail so spectacularly that they cannot refund all or most of the user deposits.
UNLESS they start using the customer deposits as their personal slush fund, like FTX did. Which would INSTANTLY be apparent under a PoR system.

>>52531166
I am telling you, chainlink has nothing to show for it. I've told you like 5 times, meanwhile you can't address my singular point that the reality doesn't reflect what cll claims.

>>52531211
>I am telling you, chainlink has nothing to show for it.
uh huh

>>52531221
Right, link can become the backbone of all data on earth, and not see a green month for years. Again, how do you reconcile that the bottom line just doesn't reflect it.

>>52531241
It's hard to build a positive trend when every bit of positive news gets instantly dumped on by Bitcoin.
That's one explanation.
When people see massive news, and then notice that the price dumps (because BTC just happened to dump at that moment), they tend to think "oh the news must have been nothing haha".
This is how the masses think, this is how you think.

>>52531241
Chainlink Labs does not control the price of the LINK token. They have built a working product which is used by just about everyone who needs oracles. This is an undebatable fact.

>>52531166
Why would it be so hard for them to rake in enough debt? They likely would have obtained debt funding when they started the exchange to initially get it up and running, maybe they want to expand operations and they get debt funding for that. You seem to think that exchanges magically appear out of thin air with no initial funding.
>refund all or most of the user deposits
Define "most", is refunding 90% of customer deposits okay? What about 80%? You've gone from "all" to "most", that doesn't sound very optimistic for customers.

>>52531255
So even after owning defi and the oracle space, link's price is just inexplicably tied to btc? Why should link's price reflect what btc does at all?

>>52531264
Do successful companies with working products usually see negative growth for extended periods of time?

>>52530319
When did centralized exchanges that are capable of getting fiat on ramps ever pretend they cared about defi? You will kyc and you will like it. Cex are necessary to onboard currently and there's no oracles that can stop them from being ran by filthy fucking scammers just like banks. It's awful.

>>52531270
>Why would it be so hard for them to rake in enough debt?
Because customer deposits make up more than 90% of liabilities in your typical exchange.

>>52531277
>link's price is just inexplicably tied to btc?
Anything listed on crypto exchanges is tied to large Bitcoin dumps through bots, limit orders, etc.

>>52531287
Absolutely, pic related.

>>52531287
Yes

>>52531303
Why would customer deposits being more than 90% of liabilities stop an exchange from raising more debt? Can you point to any regulation that states that they need to maintain this minimum 90% ratio?

>>52531384
They can raise more debt, but not enough to crash and burn spectacularly like FTX or Celsius.
Because the exchanges and projects that crash and burn that spectacularly used customer funds to rake in more debt than would otherwise be possible.
An exchange always wins, whether your trade is winning or losing. It's extremely hard to fuck up an exchange if you don't touch customer deposits.

>>52531400
>They can raise more debt, but not enough to crash and burn spectacularly like FTX or Celsius.
Weird, so they're magically stopped from over-leveraging themselves on debt funding by......by you just saying so? Not quite sure that's how it works anon, sounds like you're just making it up as you go along lol
>An exchange always wins, whether your trade is winning or losing
Ummm, are you suggesting an exchange never takes the opposite side of a trade against a customer. Or that an exchange is never exposed to position risk prior to being able to offset that risk elsewhere? I don't think you actually understand all the risks that exchanges are exposed to, or the processes they use by which they hedge that risk.

>>52531685
>so they're magically stopped from over-leveraging themselves on debt funding by......by you just saying so?
No, by their business numbers.
Unless they start using depositor funds as their slush fund, it's virtually impossible to get enough credit (debt) to overleverage.

>are you suggesting an exchange never takes the opposite side of a trade against a customer
Alameda did, but they used customer deposits.

>>52531718
>No, by their business numbers
Which business numbers? Does an investor look at their customer deposit % and think "91% oh that's fine, 90% oh that's fine too, 89% OH HELL NO"? Is that how it works according to you?
>Alameda did, but they used customer deposits
That wasn't what I asked, why did you avoid the question. Do exchanges ever take the opposite side of trades with customers?

>>52531783
>Which business numbers?
Their revenue they present when they want to get credit.

>Do exchanges ever take the opposite side of trades with customers?
If they aren't using customer funds, their impact will be extremely minimal.

>>52531802
>Their revenue they present when they want to get credit.
Oh so now it's down to revenue, well that's a change in your stance isn't it. You were adamant that it was only about the % of customer deposits earlier. So if an exchange has enough revenue to service additional levels of debt, and they want to raise additional debt funding, then they'll go ahead and do so irrespective of customer deposit %. You keep saying it's impossible but not actually giving any evidence as to what is preventing them from doing so if they're willing and the funds are available.
>If they aren't using customer funds, their impact will be extremely minimal.
Haha well that's a statement with no basis, and which you just pulled out of your ass. An exchange could take 100% the other side of every customer trade and never touch customer funds. You're literally just lying now lol

>>52531783
>That wasn't what I asked
He directly answered your question, you colossal vagina.
You asked if exchanges ever take the opposite side of bets, and he gave an example of an exchange that did exactly that.

>>52531898
FTX was the exchange, Alameda was the trading firm. Oops, guess you're retarded.

>>52531894
>so now it's down to revenue, well that's a change in your stance isn't it
It's not a change at all.
If an exchange cannot touch its customer deposits, then obviously all it has is its own revenue from things like fees.

>that's a statement with no basis
Exchanges generate revenue by taking small percentages from trades etc.
And trades are in turn a small percentage of total deposits.
So by definition, their revenue will be a tiny percentage compared to the total customer deposits.

>>52531927
Alameda was using FTX user funds, that’s the whole point.
You’re immeasurably retarded.

>>52531927
And FTX funneled customer deposits to Alameda.
It was on the news, you didn't hear? Fucking lmao

>>52531934
You said additional debt raising was restricted to a proportion of customer deposits, now you're saying it's determined by revenue. Why are you flip-flopping?
>And trades are in turn a small percentage of total deposits.
You know trade revenue has no bearing on position risk right? Kek if this is your understanding of risk management then you're totally out of your depth.

>>52532014
>You said additional debt raising was restricted to a proportion of customer deposits
Where the absolute fuck did I say that?

>You know trade revenue has no bearing on position risk right?
Trade revenue?
An exchange gets revenue from charging small percentages on trades, not from "trade revenue".

>>52531946
>>52531958
>Do exchanges ever take the opposite side of trades with customers?
^^ How the fuck can you faggots not read basic English. FTX loaning funds to Alameda is not the same as FTX taking the opposite side of a trade with a customer lol Holy shit you guys are total retards, not even understanding basic concepts.

>>52532036
>FTX loaning funds to Alameda is not the same as FTX taking the opposite side of a trade with a customer
It absolutely is.
Alameda was FTX. They just separated the two to hide the fact that they were using FTX customer deposits.

>>52532027
See >>52531303
>Why would it be so hard for them to rake in enough debt?
>Because customer deposits make up more than 90% of liabilities in your typical exchange.
^^ This was you, stating that they cannot raise more debt funding since customer deposits make up 90%+ of their liabilities.

>An exchange gets revenue from charging small percentages on trades, not from "trade revenue"
Exactly, which has no bearing on position risk. So you can have minimal trade revenue but large position risk. You do understand this right?

>>52530946
idiot or retard

>>52532048
hahaha so you don't understand what taking the opposite side of a trade means. Jesus, your lack of basic knowledge is astonishing

>>52530218
It's so easy to avoid catastrophe, just hold your own keys. People have been saying "not your keys not your bitcoin" since the beginning.
The only conclusion I can draw is that people love losing their life savings.

>>52532077
>^^ This was you, stating that they cannot raise more debt funding since customer deposits make up 90%+ of their liabilities.
If they do not touch the customer deposits, then all they can present in order to acquire more debt is their revenue.
That means it's extremely hard to raise liabilities higher than a few % relative to the customer deposits.
There is no fixed proportion here.

>Exactly, which has no bearing on position risk. So you can have minimal trade revenue but large position risk.
What does that have to do with anything?

>>52532096
I don't think you understand; Alameda WAS ftx.

>>52532128
>What does that have to do with anything?
He’s trying to weasel out, his response will be “haha you don’t understand my unhinged rambling? That means I win lol haha”.

>>52532128
>If they do not touch the customer deposits, then all they can present in order to acquire more debt is their revenue.
>That means it's extremely hard to raise liabilities higher than a few % relative to the customer deposits.
>There is no fixed proportion here.
Kek this clearly shows your lack of understanding. You're assuming here that the only source of revenue for an exchange is from direct trading fees, but you're ignoring the revenue from margin on trade spreads as well as any unrealised/realised gains and losses on speculative positions. Revenue isn't determined by the level of customer deposits, it's driven by balance turnover

Position risk is extremely important, it's crazy how you don't understand how important it is.
>customer deposits USD to an exchange, and decides to buy BTC
>exchange takes the other side of the trade and promises to provide the BTC
>exchange doesn't have BTC on hand, and decides not to go out hedge by buying BTC elsewhere with the funds the customer has deposited
>exchange now has a short BTC position risk
>a week later the BTC price is up and the customer decides to withdraw their BTC from the exchange
>exchange now needs to source the BTC, but they have to pay more to acquire it than the USD funds provided by the customer
>exchange is now facing a loss from their position
This is a super simple example of how position risk occurs

>I don't think you understand; Alameda WAS ftx
Lending customer funds is not taking the opposite side of a trade. No idea why you think they're the same thing.

>>52532153
Read >>52532279
You might learn something lol

>>52532279
>you're ignoring the revenue from margin on trade spreads as well as any unrealised/realised gains and losses on speculative positions
If they aren't using customer deposits to do this, then their impact will be minimal.
Which I said a while ago.

>Revenue isn't determined by the level of customer deposits
That's my point you complete moron.

>Lending customer funds is not taking the opposite side of a trade.
It absolutely is when those customer funds are used to take the opposite side of a trade.

FUCK you're stupid.

>>52531303
>DUDE IT'S LIKE LE AMAZON DURING THE DOTCOM BUBBLE
fuck off this piece of trash token won't even see $50 during the next bullrun

>>52532304
The question was "Do successful companies with working products usually see negative growth for extended periods of time?"

>>52532279
>exchange now needs to source the BTC
This means user-held BTC was not fully backed. Which PoR would’ve shown from the start.
Stop posting.

>>52532303
Holy fuck, you're actually mentally retarded aren't you.
>If they aren't using customer deposits to do this, then their impact will be minimal.
Revenue from margin spread has nothing to do with the level of customer deposits, it's all driven by turnover. You can have a $1 billion in deposits yet earn no margin spread revenue if customers don't trade those funds. Vice versa you can have $100 million in deposits yet earn a significant amount in margin spread revenue if customers trade numerous times.

>That's my point you complete moron.
Lol you're trying to say an exchange has low revenue unless they're stealing customer deposits, when in fact the sole driver of revenue is trade turnover. The more customers trade the more revenue the exchange earns. Why do you think exchanges have trading competitions and offers? It's to get you to trade and turnover your balance.

>It absolutely is when those customer funds are used to take the opposite side of a trade.
You literally do not understand what taking the other side of a trade is, you're a fucking retard, it's confirmed. Taking the opposite side of a trade has nothing to do with using customer funds lol

>>52532440
>Revenue from margin spread has nothing to do with the level of customer deposits
Exchange can't make much from margin trading if all they have to trade margin with is their own revenue.

>The more customers trade the more revenue the exchange earns.
And that revenue will invariably be dwarfed by customer deposits.

>You literally do not understand what taking the other side of a trade is
You're absolutely stupid, Alameda WAS ftx.

Also see >>52532422

>>52532422
kek exactly.
Didn't even bother to read that far into the wall of text.

>>52532481
You’re getting caught up in his muddying the water.

>>52532422
kek one customer does a trade and the exchange doesn't have time to source the crypto so it immediately fails the PoR that apparently runs every second according to you. Whoops time to pack it up and go home, exchange is insolvent lol Fucking amazing idea anon, you're a real fucking genius.

>>52532588
>kek one customer does a trade and the exchange doesn't have time to source the crypto so it immediately fails the PoR
Absolutely.

>>52530248
Jews live to steal

>>52532588
>so it immediately fails the PoR
Yes.

>the PoR that apparently runs every second
The exchange in your example only bought the necessary BTC when the user wanted to withdraw a fucking week later.

Stop doing this to yourself.

>>52530818
>Tell it to literally everyone suddenly talking about it now
ummm??? no one?

Twitter echo chambers aren't real life

>>52532677
>no one?
Except all the major exchanges for instance.

>>52532481
>Exchange can't make much from margin trading if all they have to trade margin with is their own revenue.
Hahahaha that's not a margin spread! It has nothing to do with an exchange using its own revenue, it is generated based on position taking! HAHAHA

>And that revenue will invariably be dwarfed by customer deposits.
And yet you switched to say debt raising is driven by revenue, hahaha and now you're back to saying that revenue is insignificant. Make up your fucking mind, is revenue significant for debt raising or not? Holy fuck you can't even keep a single fucking story straight. "it's significant, no it's not significant, oh it's significant again" FUCKING MAKE UP YOUR MIND FAGGOT

>You're absolutely stupid, Alameda WAS ftx.
Me: Taking the opposite side of a trade has nothing to do with using customer funds
You: OMFG I SUCK COCKS AND ALAMEDA WAS FTX BUT I CAN'T EXPLAIN WHAT TAKING THE OTHER SIDE OF A TRADE ACTUALLY MEANS OMG THESE COCKS TASTE SO NICE

>>52532602
>>52532629
Congrats, all exchanges are permanently insolvent since there are trades happening every second and the Proof of Reserves would never be 1 to 1 on an itemised asset basis. Quick, you better get on Twitter and start showing your evidence how Coinbase and Binance are actually insolvent. No no, go ahead, I'm sure everyone needs to know that Binance has gone under because fatass anon did a $10 buy of BTC 1 second ago.

>>52530248
There is no relation, Sergey just arrives at parties unannounced and talks about himself and his dumb project while nobody wants to listen. That's what's happening here

>>52532852
>Hahahaha that's not a margin spread!
That's literally what you described: >exchange now has a short BTC position risk

>you switched to say debt raising is driven by revenue
That's what I said from the very beginning.

>>52532949
>the Proof of Reserves would never be 1 to 1
Not if you're not actually holding the assets people nominally hold with you, no.

Your whole example is exactly why people should demand proof of reserve, to prevent the following (and I quote):
>>52532279
>>exchange now needs to source the BTC, but they have to pay more to acquire it than the USD funds provided by the customer
>>exchange is now facing a loss from their position

>>52533023
>That's literally what you described: >exchange now has a short BTC position risk
The exchange has only taken a position, they haven't earned any spread yet since they need to close out the position to lock in the spread. You're literally missing the whole second half of the process hahahaha OMFG and here you are trying to tell me how exchanges work. The margin is the value between the bid/offer and the spot price. So an exchange that sells to a customer on the offer, and then immediately turns around and buys from another customer at the bid price locks in a margin spread value of (offer - bid) x volume. That is on top of any set fees they charge to each customer to execute the trade. The fees are designed to cover the expected risk of the exchange struggling to close out their position, the margin spread is pure profit.

>That's what I said from the very beginning.
>>52531166
>If an exchange has 100% customer deposit backing, it's very hard for them to rake in enough debt to fail so spectacularly that they cannot refund all or most of the user deposits.
>>52531303
>Because customer deposits make up more than 90% of liabilities in your typical exchange.
^^ This all you? Sure doesn't sound like you mention anything about revenue there, in fact, you specifically mention customer deposits. Why lie?

>Not if you're not actually holding the assets people nominally hold with you, no
So how often should Proof Of Reserves be run for every exchange? Daily? Hourly? Every Minute? Every Second?

>>52530306
>this is why we need regulation

who is going to pay for the regulation and how?

>>52533241
Anon, by your own example the exchange has to source the customer's BTC when he decides to withdraw, because they never actually had it all that time.
This is EXACTLY what proof of reserve is meant to prevent.

Go fucking sperg in the corner.

>>52530218
>We don't have to rely on "Trust Us" promises
When is staking coming? How long will our tokens be locked up in v0.1 before the transition to v1? When is CCIP coming, which was announced to be release this year? Can I find these answers on Etherscan, or do I have to just "Trust the plan?"

>>52530956
>Pajeet, my son, you are crypto investor now
> Will you choose crypto exchange A with 1-1 ratio of customer funds proved on chain but with unknown liabilities
> Or crypto exchange B "just trust us bro" asset sheet and unknown liabilities.

>>52533313
There's no slashing in v0.1, you don't have to trust anything since you can see your Link in the pool address at all times.

>>52533419
We have to trust Sergey to release our funds back to us though. There is a nonzero chance they just stay locked up forever, I can say this because it's not a time-lock smart contract, it's up to the decision-making of one or more human beings. It's a textbook "paper promise."

>>52533444
>We have to trust Sergey to release our funds back to us though.
That's the case a lot of the time with any kind of staking.

>>52533455
You're not necessarily wrong but it's still a paper promise. It shouldn't be this way, it should be a cryptographically guaranteed system backed by definitive truth.

>>52533471
>but it's still a paper promise
Only because the release of the tokens is tied to the release of something Chainlink themselves are developing.

>>52533299
>anon goes to buy BTC on Coinbase
>1 second after anon hits Market Buy, if Coinbase doesn't have his BTC in their cold wallet and runs a Proof of Reserve then they're obviously insolvent and he demands they shutdown.
>anon again clearly demonstrates his lack of knowledge of how exchanges work
Kek, can't wait for Coinbase to provide a full proof of reserves so anon here can rush scroll through a list of 10,000 tokens looking for his $2.50 of $catpissinu that he just bought.

>>52533557
>>1 second
By your example it was only when the customer decided to withdraw that the exchange actually started looking for his BTC. You even specified "a week later".

>>52533581
I could have made it any arbitrary time value. 1 week, 1 day, 1 hour, 1 min, 1 sec. What's the maximum amount of time before you start having a bitch fit?

>>52533607
>I could have made it any arbitrary time value
Well no because you said "when the customer wants to withdraw".

>>52533623
So if the customer wants to withdraw 1min after they bought should the exchange have it in their cold wallet by then? And if they don't are they insolvent and should be shut down?

>>52533637
The exchange should not start looking for a client's BTC when the client wants to withdraw.

>>52533557
>1 second after anon hits Market Buy, if Coinbase doesn't have his BTC in their cold wallet
What do you think "buy" means? Somebody sold him that BTC in the first place, another Coinbase user, therefore the funds should have always been in Coinbase wallets.

>>52533668
Stop dodging questions, should they have the BTC in their cold wallet within 1min? If they don't is the exchange insolvent and should it be shutdown?

>>52533708
Jesus, do I have to explain exchanges taking the other side of trades to almost everyone here. When a normie goes to Coinbase and clicks buy on an asset on their front page, who the fuck do you think is on the other side of that trade? It ain't another Coinbase user, it's Coinbase themselves!

>>52533767
The BTC should be in the wallet as soon as the trades transactions clear, ideally.
If it isn't, PoR could be refined to include provisions for pending transaction confirmations.

But the exchange should start SEARCHING for the client's BTC immediately. Not when the client decides to withdraw.

>>52531021
>itsthhhh a consthpirathy!!!111

Stfu already

>>52531221
>duuuuuuuude infographics

>>52533884
Hahaha are you seriously going to make people sit there for 10mins waiting for their transaction to confirm while Coinbase goes off hunting for 0.001 BTC each time a transaction is done.
Have you not thought through the logistics of this? Every second Coinbase would need to initiate dozens if not hundreds of transfers on blockchains, shifting tiny amounts of crypto back and forth to match up to the buying/selling on their site. You'd bankrupt them just with gas fees lol
I already know what the solutions are, but just wanted to hear your ridiculous idea of how the process should work lol "Hey guys, Ranjeet wants to buy $0.50 of BTC, can we fire off a transaction to transfer 0.000030 BTC into our cold wallet from another exchange. Thanks!"

>>52533799
Right, so that’s why you don’t, instead you use a limit order on coinbase pro or advanced, at which point you do buy your Bitcoin from another coinbase user.

>>52530218
I enjoy watching these self-professed technofuturists get pulled into pieces by the chaos of their "new" inventions. They are slowly coming to the same realizations that everyone before them already lived through and learned from, and they are getting fucked over every step of the way by con artists, scammers and even the FBI.

They don't want regulation, then they get scammed and call for regulation.

These bits of code literally, actually, indisputably have zero value, yet they refuse to tie them to something that does. So they tie it to the dollar, which also has zero actual value other than faith (since the gold standard was dropped).

They don't want centralization or exchanges, but they also want more adopters, so they adopt centralization and effectively "invent" banking for crypto. And what group offers that service? Well, its the group you are all familiar with. Just look at who ran Celsius and FTX. Indeed, they shut it down.

In the next few years crypto will either be banned or the federal government will take the dollar digital, and all this work will have effectively made us easier to track, tax, punish, and prosecute. These crypto libertarian "pioneers" are laying the foundation for the government to have even greater control over the people. Pure irony.

>>52534090
Are you suggesting Coinbase remove what is most likely the most profitable per trade part of their website? That's your stunning master plan?

>>52534080
Typically, every Sat being traded on an exchange is provided by the seller who isn't the exchange. You colossal retard.
And if the exchange is the one doing the buying, they should have a reserve of BTC and only sell as much as is in it.