I received the following two messages recently:
Ledn
Nexo
The last two CeFi yield platforms are pulling out of the US. I had already pulled my funds out of Nexo since it had a platform token similar to Celsius, and who knows if that token is being used similarly to CEL and FTX. I did still have both USDC and BTC on Ledn until yesterday. I never had the 'pleasure' of using FTX, however I did have funds on Celsius, BlockFi, and Voyager among others. I get bankruptcy related emails for the failed ones on practically a daily basis. The bad news was my 'custodial arbitrage' thesis was wrong, as many of these platforms were sticking their hands into the same cookie jar. It turned out though the pool of capital earning the yield was large, the counterparties had all kinds of shenanigans going on, so that created lots of contagion going all the way back to Luna and 3AC. So that's how we find ourselves in the pickle that we are in today. The good news was that I pulled out the majority of my funds when all the FUD started. I figured there might be a bank run because of the FUD, and that might cause liquidity problems, and I could always transfer them back later when things settled down. Things were much much worse than that. BlockFi and Ledn had always touted their 'conservative' risk strategies, and it turns out Ledn was the last man standing in terms of token-free platforms.
I think this entire mess was a huge learning experience for all of us. I'm sure that at least some that read this got some funds caught in this shitstorm. I feel for you.
For me it's DeFi only going forward, and that's only with a small percentage of my stack. The 80/20 rule works very well for me. It was a damn lucky thing that all of these platforms started dropping their interest tiers, which was suspicious enough, and the fact that they created any tiers at all should have been a huge red flag. The highest yield tiers dropped from multiple BTC to a mere .1 BTC at many of them. I might consider Ledn again should they open back up to US markets, how the SEC could classify a lending platform with no token as a security is beyond me. Ledn is supposed to be offering BTC backed mortgages soon, so that should be interesting.
Did any of you get caught up in this mess and care to comment? I'd understand if you don't!
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I don't mind commenting ... 😉
While avoiding these two you mention, as well as FTX, the "fallout" has unavoidably affected everyone in crypto, with the "tanked" overall market prices. To the tune of ... ?...? how many bizillions of dollars?
Well ... As we have been given some idea, that is NOT an easy question to answer. Why is that? All the ... "creative" ... ways all of these various enterprises have willing chosen to buy (or ?...?) into "each other," resulting in the domino-effect, once any one of them begins to fail ... And take the rest with them ... Eventually ...
All tied together by "creative accounting" methods which do not stand up well to "daylight" ... The great disinfectant ... These people know all about that, as they are not stupid (what are they then?)
Anyway, the "unfolding drama" continues, like a slow motion train wreck. Like this morning. Starting my day out with the latest downturn, on the news of Silvergate "Bank" and its pending, deemed inevitable and unavoidable, collapse ...
For my own investing, I have tried to maintain some long-term confidence that blockchains themselves are still as sound as ever. "Bridges" between them? Not so much ...
All of this against the backdrop of the enormous power the various "Almighty State" agencies have to bring great harm, with however they decide to "arbitrarily" (any "logic" to their decisions? => Check into Gary Gensler's personal relationship with so many of the ... "players" ... in the FTX drama ...) decide anything related to how they will choose to "regulate" crypto.
Of course, they are only doing it to protect all of us "little people," so have no fear that they really are trying to figure out how to preserve the monopolistic power they wield by controlling the ... "flow of money" ...
Okay, off for a 2nd cup of coffee ... ☕ ... as I begin a wonderful new day ... 🌄 ... in our "crazy, new normal" world ...
Have a good one! 👍👋
I agree that whether or not you had an account the contagion hit you. With the MTGOX coins getting released and ETH Shanghai upgrade, I don't think we are out of the woods yet.
Agreed we haven't seen the fallout from Silvergate or Metropolitan Commercial Bank (I have two debit cards powered by them, luckily the Coinbase card isn't).
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For sure, I definitely got caught up in the Celsius shenanigans. I've managed to get some of my funds from the platform before the freeze, and as a partial custodian account holder with them, I was also able to remove some of my ETH yesterday.
However, I definitely still have more than I'd like tied up in the nonsense Ch.11 proceedings. I do think there is a place for CeFi yield in addition to DeFi yield since there definitely are people interested in crypto that would rather be hands-off with their positions than have to manage their own DeFi positions. But that segment of the market just cannot move forward successfully until appropriate regulations are put in place to avoid these catastrophic blow-ups we saw in 2022.
Personally, I am rooting for Celsius to manage to come out of Ch.11 proceedings with a NewCo that follows regulations and provides a centralized place to aggregate yield and staking opportunities for people who don't want to bother with having to manage DeFi themselves. I think there is still a possibility for services like this to be successful, but nothing will happen without proper regulations in place.
Glad you managed to escape with some of your stack. I'm not sure about Cel going forward, they will be tainted.
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Control freaks gotta control.™
Hive solves this.
When people figure that out, it's to the moooon!
We'll see if Hive is the panacea!
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Hive is the way.
It's been lost on its way to the top by the greed of a few, but as the inflation dilutes those few we will only grow stronger, imo.
IF we keep voting that inflation to the few, it may take more time than some of us have.
I don't generally vote posts that have more than 10hbd on them as a rule.
My autovoter is a separate account and uses a dust vote.
IF more people did this things would improve, iyam.