What

Proposal for a DeFi subgroup and other items on the Roadmap: Mike McCoy from BlockDaemon


See event page on LinkedIn: 

Abstract

  1. Intro and announcements - 2 mins
  2. Name Change proposal - 5 mins
    1. The range of concerns and the topics of the group have gone beyond pure Capital Markets into short term money markets, including payments and financial infrastructure. This unified approach should be reflected in the name of the group.
  3. DeFi subgroup proposal - 30 mins
    1. Mike McCoy formerly of the Healthcare SIG, now in BlockDaemon is proposing a DeFi sub-group. This is of specific interest to us, since DeFi is in the heart of the crypto-sphere and because of recent troubles on that front. He will make a presentation for all those who are interested.
  4. Project Hamilton feedback - 10 mins
    1. We have not been able to get together on collaborative answers, let us share our thoughts.
  5. NEFERTI project- status - 10 mins
    1. We have been getting a slow start on this project since it aims to disrupt the entire infrastructure and it is difficult to know where to start.
  6. AOB - 10 mins

Where

Online

https://zoom.us/my/hyperledger.community.backup?pwd=dkJKdHRlc3dNZEdKR1JYdW40R2pDUT09=

When

May 18th, 10:00 AM EDT Time


Presentation

Recording 

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1 Comment

  1. Vipin Bharathan

    Steps to induce a death spiral in an algorithmic stablecoin from FreddieRaynolds. This is how the real attack went down.

    FreddieRaynolds

    1. Long $100M of $LUNA PnL impact: $0 Net PnL: $0


    2. Purchase $100k of $LUNA and immediately withdraw from exchange and swap to $UST using the Terra seigniorage mechanism. Fee is 0.5%. Repeat 10,000 times (use a bot) so you accumulate 500M UST for ~$502.5M. https://docs.terra.money/Reference/Terra-core/Module-specifications/spec-market.html#swap-procedure… PnL impact: -$2.5M Net PnL: -$2.5M

    3. Sell your initial $100M $LUNA from step 1. Since there has been $500M of $LUNA market bought in step 2 looking at the current order books/PA I think a reasonable estimate here is +30% or $30M profit. PnL impact: +$30M Net PnL: +$27.5M

    4. Deposit $200M worth of bETH on

    @Anchor_Protocol

    and take a loan out for 100M $UST PnL impact: $0 Net PnL: +$27.5M

    5. Short $100M of $LUNA PnL impact: $0 Net PnL: +$27.5M

    6. In $100k chunks use seignorage again to convert 500M $UST (step 2) and 100M $UST (step 4) to $LUNA. After each conversion dump the $LUNA. Conversion fee 0.5% and the rate limit means this step will take a week. 600M UST sold for ~$597M. PnL impact: -$3M Net PnL: +$24.5M

    7. Close the $LUNA short from step 5. Since there has been $600M of $LUNA market sold in step 6 I think a reasonable estimate here is -30% for $LUNA price or $30M profit. PnL: $30M Net PnL: +$54.5M

    8. Payback loan from step 4 and reclaim your bETH. PnL: $0M Net PnL: +$54.5M

    9. Repeat. After a few iterations the protocol will collapse at step 6. Many #Lunatics assume that $LUNA can never have a value of 0. This is only true if the future circulating supply of $LUNA isn’t ∞ but above process leads to ∞ $LUNA being minted…