Ethereum

thegentleway

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/

Counterparty risk isn’t limited to a borrower defaulting: that’s credit risk. If you use rocketpool then there is a (very significant since it’s unregulated) risk they won’t honour the agreement, which is a counterparty risk…

aaj123

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/

Counterparty risk isn’t limited to a borrower defaulting: that’s credit risk. If you use rocketpool then there is a (very significant since it’s unregulated) risk they won’t honour the agreement, which is a counterparty risk…

No this is where you misunderstand. There is no one in rocketpool that you are trusting to honour any agreement. There is simply a smart contract that's handling the pool. The contract is open source and audited. Code is law here. No trust involved. 

There is no one who can default on you. The only risk of you will is of the smart contract having a bug. But then it's open source and audited so there is nothing malicious possible behind the scenes. 

That's the whole point of rocketpool being called a 'decentralised' non custodial staking pool.

Read more:

https://medium.com/rocket-pool/rocket-pool-staking-protocol-part-1-8be4859e5fbd

thegentleway

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/

Counterparty risk isn’t limited to a borrower defaulting: that’s credit risk. If you use rocketpool then there is a (very significant since it’s unregulated) risk they won’t honour the agreement, which is a counterparty risk…

No this is where you misunderstand. There is no one in rocketpool that you are trusting to honour any agreement. There is simply a smart contract that's handling the pool. The contract is open source and audited. Code is law here. No trust involved. 

There is no one who can default on you. The only risk of you will is of the smart contract having a bug. But then it's open source and audited so there is nothing malicious possible behind the scenes. 

That's the whole point of rocketpool being called a 'decentralised' non custodial staking pool.

Read more:

https://medium.com/rocket-pool/rocket-pool-staking-protocol-part-1-8be4859e5fbd

Great so you agree there is a risk of the smart contract having a bug. This would be a counterparty risk.

Another obvious one would be the wallet the smart contract is supposed to pay you from is empty…

If you’re not validating the blockchain yourself then somebody else is doing it for you and therefore there is counterparty risk.

aaj123

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/

Counterparty risk isn’t limited to a borrower defaulting: that’s credit risk. If you use rocketpool then there is a (very significant since it’s unregulated) risk they won’t honour the agreement, which is a counterparty risk…

No this is where you misunderstand. There is no one in rocketpool that you are trusting to honour any agreement. There is simply a smart contract that's handling the pool. The contract is open source and audited. Code is law here. No trust involved. 

There is no one who can default on you. The only risk of you will is of the smart contract having a bug. But then it's open source and audited so there is nothing malicious possible behind the scenes. 

That's the whole point of rocketpool being called a 'decentralised' non custodial staking pool.

Read more:

https://medium.com/rocket-pool/rocket-pool-staking-protocol-part-1-8be4859e5fbd

Great so you agree there is a risk of the smart contract having a bug. This would be a counterparty risk.

Another obvious one would be the wallet the smart contract is supposed to pay you from is empty…

If you’re not validating the blockchain yourself then somebody else is doing it for you and therefore there is counterparty risk.

The risk of open source software having a bug is certainly not the same as cpty risk which by its nature is due to opaqueness of the counterparty's activities. Sure it is a different kind of risk which one needs to be comfortable with. 

Your second point is a non issue. The smart contract is not handed over your withdrawal keys but only validation rights. The code can be seen to be such that it can only validate using your eth but cannot move it except when you withdraw back to your own wallet. That is why rocketpool is called a non custodial solution. 

thegentleway

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/

Counterparty risk isn’t limited to a borrower defaulting: that’s credit risk. If you use rocketpool then there is a (very significant since it’s unregulated) risk they won’t honour the agreement, which is a counterparty risk…

No this is where you misunderstand. There is no one in rocketpool that you are trusting to honour any agreement. There is simply a smart contract that's handling the pool. The contract is open source and audited. Code is law here. No trust involved. 

There is no one who can default on you. The only risk of you will is of the smart contract having a bug. But then it's open source and audited so there is nothing malicious possible behind the scenes. 

That's the whole point of rocketpool being called a 'decentralised' non custodial staking pool.

Read more:

https://medium.com/rocket-pool/rocket-pool-staking-protocol-part-1-8be4859e5fbd

Great so you agree there is a risk of the smart contract having a bug. This would be a counterparty risk.

Another obvious one would be the wallet the smart contract is supposed to pay you from is empty…

If you’re not validating the blockchain yourself then somebody else is doing it for you and therefore there is counterparty risk.

The risk of open source software having a bug is certainly not the same as cpty risk which by its nature is due to opaqueness of the counterparty's activities. Sure it is a different kind of risk which one needs to be comfortable with. 

Your second point is a non issue. The smart contract is not handed over your withdrawal keys but only validation rights. The code can be seen to be such that it can only validate using your eth but cannot move it except when you withdraw back to your own wallet. That is why rocketpool is called a non custodial solution. 

Opaqueness of counterparty?!

credit risk is when the borrower defaults. OTOH counterparty risk is the broader risk of any party defaulting in a transaction…

Rocketpool has to have node operators and it can’t control them. Anybody can become a node operator so it’s vulnerable to hostile takeover. The node operators can also chose to upgrade the contracts, I.e. change them.  Plenty of counterparty risk to the node operators even if you don’t give them your keys. 

aaj123

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/

Counterparty risk isn’t limited to a borrower defaulting: that’s credit risk. If you use rocketpool then there is a (very significant since it’s unregulated) risk they won’t honour the agreement, which is a counterparty risk…

No this is where you misunderstand. There is no one in rocketpool that you are trusting to honour any agreement. There is simply a smart contract that's handling the pool. The contract is open source and audited. Code is law here. No trust involved. 

There is no one who can default on you. The only risk of you will is of the smart contract having a bug. But then it's open source and audited so there is nothing malicious possible behind the scenes. 

That's the whole point of rocketpool being called a 'decentralised' non custodial staking pool.

Read more:

https://medium.com/rocket-pool/rocket-pool-staking-protocol-part-1-8be4859e5fbd

Great so you agree there is a risk of the smart contract having a bug. This would be a counterparty risk.

Another obvious one would be the wallet the smart contract is supposed to pay you from is empty…

If you’re not validating the blockchain yourself then somebody else is doing it for you and therefore there is counterparty risk.

The risk of open source software having a bug is certainly not the same as cpty risk which by its nature is due to opaqueness of the counterparty's activities. Sure it is a different kind of risk which one needs to be comfortable with. 

Your second point is a non issue. The smart contract is not handed over your withdrawal keys but only validation rights. The code can be seen to be such that it can only validate using your eth but cannot move it except when you withdraw back to your own wallet. That is why rocketpool is called a non custodial solution. 

Opaqueness of counterparty?!

credit risk is when the borrower defaults. OTOH counterparty risk is the broader risk of any party defaulting in a transaction…

Rocketpool has to have node operators and it can’t control them. Anybody can become a node operator so it’s vulnerable to hostile takeover. The node operators can also chose to upgrade the contracts, I.e. change them.  Plenty of counterparty risk to the node operators even if you don’t give them your keys. 

Elaborate how any node operator or a group of them can possibly cause you to lose your eth in rocketpool. You would have noted that Rocketpool node operators always have to also stake their own eth I.e have skin in the game and further hold collateral in the form of RPL. If they get penalties or slashings while staking, the smart contract is designed to hit the operator with these losses from their collateral. There is no way at all the node operator can maliciously run away with your eth. If you haven't given your keys, you know its not possible to lose custody of your coins. 

Frequentlyhere

aaj123 said:

You are also wrong that all of the yield on eth is from other holders. Infact most of it comes from new issuance. It's the burn that occurs due to fees paid by anyone transacting and this is a benefit to all and not just stakers. The fact that burn is higher than new issuance is not inevitable part of the design but rather because usage of eth has become high enough to generate so much burn. 

Yeah this still very much sounds like one ETH person passing "yield" to another. Just because it's a new person doesn't make it not someone also doing stuff in the ETH system.

I am inclined to believe most crypto skeptics do not do an iota of research before replying with an answer that suits their preconceived notions. 

I freely admit that I don't know huge amounts about Ethereum, which is why I've been asking you basic questions about it. What I do know about though is financial products and economics.

So whilst I don't know the ins and outs of Rocketpool as @theGentleway seems to, what I do appreciate is that you don't get yield without risk. So if I hear answers along the line of "high returns, no risk", then there's BS involved somewhere.

Above said, we're at least not in the territory here of Celsius and the like (I had several discussions with people angrily insisting their 15% yield was zero risk - lol).

In this case, returns are at least coming from somewhere. As I said before however, the question is utility:

They pay fees because they see value in transacting with eth to gain access to buy nfts, defi products,  dexes, etc

So, fees to trade jpegs, fees to trade crypto. OK, yes there is some demand here, but it is yet more of the type " we just need more and more people to keep on joining....."  which when the products are NFT's and the promise of more crypto trading, I just don't feel convinced there's going to be widespread demand for it.  Just my view though, and there are lots of things people part money with that I can't fathom.

aaj123

Frequentlyhere said:

aaj123 said:

You are also wrong that all of the yield on eth is from other holders. Infact most of it comes from new issuance. It's the burn that occurs due to fees paid by anyone transacting and this is a benefit to all and not just stakers. The fact that burn is higher than new issuance is not inevitable part of the design but rather because usage of eth has become high enough to generate so much burn. 

Yeah this still very much sounds like one ETH person passing "yield" to another. Just because it's a new person doesn't make it not someone also doing stuff in the ETH system.

I am inclined to believe most crypto skeptics do not do an iota of research before replying with an answer that suits their preconceived notions. 

I freely admit that I don't know huge amounts about Ethereum, which is why I've been asking you basic questions about it. What I do know about though is financial products and economics.

So whilst I don't know the ins and outs of Rocketpool as @theGentleway seems to, what I do appreciate is that you don't get yield without risk. So if I hear answers along the line of "high returns, no risk", then there's BS involved somewhere.

Above said, we're at least not in the territory here of Celsius and the like (I had several discussions with people angrily insisting their 15% yield was zero risk - lol).

In this case, returns are at least coming from somewhere. As I said before however, the question is utility:

They pay fees because they see value in transacting with eth to gain access to buy nfts, defi products,  dexes, etc

So, fees to trade jpegs, fees to trade crypto. OK, yes there is some demand here, but it is yet more of the type " we just need more and more people to keep on joining....."  which when the products are NFT's and the promise of more crypto trading, I just don't feel convinced there's going to be widespread demand for it.  Just my view though, and there are lots of things people part money with that I can't fathom.

I have never claimed staking in any form is zero risk. Only that the risk is very different from the typical counterparty risk in traditional lending. The whole basis of staking is to put up your money as collateral and accept responsibilities. That obviously means your money is at a type of risk that you have to work to manage. 

Frequentlyhere

aaj123 said:

I have never claimed staking in any form is zero risk. Only that the risk is very different from the typical counterparty risk in traditional lending. The whole basis of staking is to put up your money as collateral and accept responsibilities. That obviously means your money is at a type of risk that you have to work to manage. 

Fair enough.

On the utility aspect, what's your view? Do you think NFTs, crypto trading and the like are going to be able to draw substantially increasing numbers of people in?

I had heard the demand for NFTs had collapsed, is there still actually mileage in them?   

And re: crypto trading, I thought you were generally against crappy coin trading yourself, or is this something different?

thegentleway

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

thegentleway said:

aaj123 said:

Name one asset other than ETH that gives a yield with zero cpty risk and where the asset is one whose supply is decreasing (and this due to usage based burn).

There is absolutely none and this is what puts ETH in a league of its own. You had the heads up and the facts now. I always sympathise with those who are uninformed or get misled by media but not those who were provided facts and yet chose to stick with pre-conceived notions. So do your research now instead of off-the bat coming up with the 'But it is shuffling poker chips' response.

🤦‍♂️ zero counterparty risk? How did you figure that out?!

Because the yield I am referring to doesn't come from a counterparty. This isn't lending. The yield I am referring to is one given by the ETH network in return for you staking your eth and accepting responsibilities of transaction validation on the network. There is a lot to learn here so here you go:

https://ethereum.org/en/staking/

Thanks but unless you’re running your own node(s) then you are exposed to counterparty risks. If you are running your own node(s) then there are still risks: validator penalties, slashing, etc…

The validator risks / penalties / slashing, sure but that's very different from counterparty risk. And if you use centralised exchanges for staking convenience then ofcourse you take on cpty risk against the exchange.

There is however one extremely good middle way where you pay a 15% fee but at the same time get others to stake for you while still having no cpty risk abd buffered against penalty / slashings. Look at Rocketpool.

https://rocketpool.net/

Counterparty risk isn’t limited to a borrower defaulting: that’s credit risk. If you use rocketpool then there is a (very significant since it’s unregulated) risk they won’t honour the agreement, which is a counterparty risk…

No this is where you misunderstand. There is no one in rocketpool that you are trusting to honour any agreement. There is simply a smart contract that's handling the pool. The contract is open source and audited. Code is law here. No trust involved. 

There is no one who can default on you. The only risk of you will is of the smart contract having a bug. But then it's open source and audited so there is nothing malicious possible behind the scenes. 

That's the whole point of rocketpool being called a 'decentralised' non custodial staking pool.

Read more:

https://medium.com/rocket-pool/rocket-pool-staking-protocol-part-1-8be4859e5fbd

Great so you agree there is a risk of the smart contract having a bug. This would be a counterparty risk.

Another obvious one would be the wallet the smart contract is supposed to pay you from is empty…

If you’re not validating the blockchain yourself then somebody else is doing it for you and therefore there is counterparty risk.

The risk of open source software having a bug is certainly not the same as cpty risk which by its nature is due to opaqueness of the counterparty's activities. Sure it is a different kind of risk which one needs to be comfortable with. 

Your second point is a non issue. The smart contract is not handed over your withdrawal keys but only validation rights. The code can be seen to be such that it can only validate using your eth but cannot move it except when you withdraw back to your own wallet. That is why rocketpool is called a non custodial solution. 

Opaqueness of counterparty?!

credit risk is when the borrower defaults. OTOH counterparty risk is the broader risk of any party defaulting in a transaction…

Rocketpool has to have node operators and it can’t control them. Anybody can become a node operator so it’s vulnerable to hostile takeover. The node operators can also chose to upgrade the contracts, I.e. change them.  Plenty of counterparty risk to the node operators even if you don’t give them your keys. 

Elaborate how any node operator or a group of them can possibly cause you to lose your eth in rocketpool. You would have noted that Rocketpool node operators always have to also stake their own eth I.e have skin in the game and further hold collateral in the form of RPL. If they get penalties or slashings while staking, the smart contract is designed to hit the operator with these losses from their collateral. There is no way at all the node operator can maliciously run away with your eth. If you haven't given your keys, you know it’s not possible to lose custody of your coins. 

Your original stake can be effectively lost if you can never withdraw it.
Your yield can easily be lost if node operators change the contract(s).