Crapto thread: Going Blind to own the poors

[boredsocial]

If you’re a billionaire there’s not a single place on earth that can’t be your version of a great life.

[Surf]

I dunno, seems even billionaires in Russia can’t afford safe windows

[goofy]

A key feature of NFTs has completely broken

OpenSea, the biggest NFT marketplace still fully enforcing royalty fees, said today that it plans to stop the mandatory collection of resale fees for artists. Starting March 2024, those fees will essentially be tips — an optional percentage of a sale price that sellers can choose to give the original artist. If the seller doesn’t want to hand over any money, that’ll be their choice.

Huh, that’s an odd qualifier - “biggest NFT marketplace still fully enforcing royalty fees”…

Blur, which has overtaken OpenSea as the biggest NFT marketplace by trading volume, only enforces a 0.5 percent fee on most collections, whereas creators typically set their fees at 5 to 10 percent.

This is amazing. OpenSea basically had a monopoly (they were the Google of NFT marketplaces) when the craze started in 2021, but through it all they were so greedy and incompetent that it seemed more like an accident that they were in the right place in the right time. And now they’ve lost their throne.

But yeah, this seems like a super predictable outcome - nothing about the blockchain/NFT contracts necessarily enforces that creators receive royalty fees on sales, that’s just something that OpenSea and other marketplaces integrated into their payment system voluntarily. And then other marketplaces opened up that were like “oh look, we can steal market share by just…not doing that, and letting buyers & sellers keep more money at the expense of creators” and lolol it totally worked

Others, including OpenSea, are trying to frame it as a necessarily, positive change as the marketplace evolves. OpenSea CEO Devin Finzer criticized the fees’ “ineffective, unilateral enforcement” and said that creators will find other ways to monetize their work.

“Our role in this ecosystem is to empower innovation beyond a single use case or business model,” he writes in the blog post announcing that OpenSea will no longer support the ecosystem’s primary business model.

In other news, this made me wonder what happened to Nate Chastain (former big product guy who was charged with insider trading, buying NFTs that he knew were going to be featured on the OpenSea front page and then selling them). He was convicted in May

[Surf]

Does this mean NFTs are completely done going forward (not that they ever weren’t) or possible to put the creator fees in the contracts?

[goofy]

@Surf

Does this mean NFTs are completely done going forward (not that they ever weren’t)

I think this betrays a truth about NFTs that everyone kinda knew but didn’t want to admit, which is that compensating creators was never the goal. So once the market provided an option that was willing to embrace that truth, it won. Are creators going to stop making NFTs now that they only get a tenth as much royalties after the initial collection sale? …probably not. Are people who were already trading NFTs going to stop because they’re outraged that creators are being treated this way? no (their greed is the reason this is happening!).

@Surf

or possible to put the creator fees in the contracts?

I’m sure others have thought about this more thoroughly than I have so I dunno if there’s better answers to this, but my sense is…not really. The current way NFT sales work is…

• you initiate a transaction with the NFT marketplace contract to buy something for whatever price
• the marketplace contract deducts fees (its cut and the creator royalties) & sends them to the appropriate locations
• the marketplace contract tells the PonziNFT contract to transfer the seller’s token to you
• ta da, the sale is done

Notably here, the PonziNFT contract knows nothing about royalties or price; the transfer of money in this transaction is all handled by the marketplace. While you could envision some NFT contract standard that did take this into account, what’s tricky about that is that marketplaces have no obligation to be honest about it. Like, if I buy something for 3 ETH, the marketplace could just lie and tell the PonziNFT contract that I only paid 0.01 ETH for it so that a much smaller amount of royalties is taken out, and I don’t know that there’s really a way for the PonziNFT contract to know that? There’s always kind of been a loophole around doing private sales to avoid marketplace + royalty fees, and I don’t know that there’s really any way for contracts to block that, at least not without severely restricting the freedom of people to transfer their NFTs between accounts freely.

[riverman]

Maybe I’ll head over to UP and take a victory lap

On second thought probably don’t want to get doxxed and threatened by lunatics

[goofy]

Thinking about it a little more, maybe the way to make something like that work would be that creators could write their contracts so that when you do the setApprovalForAll transaction (the one that lets OpenSea or whatever marketplace transfer your tokens on your behalf), which says “I consent to letting this other address here transfer my tokens around”, the contract only allows that for some whitelisted group of addresses that it knows belongs to marketplaces that respect its royalty fees. I think that would let the NFT contract allow its tokens to be sold on OpenSea (at least until now ) while not letting them be sold on Blur, or other marketplaces that won’t pay out royalties.

This wouldn’t stop private sales, but it kinda would - without setApprovalForAll, the only way to do a private sale is if you really trust the other party to not fuck you, because at that point you have to exchange the money & tokens yourselves instead of going through an intermediary, and lol no one wants to do that on the blockchain.

[kerowo]

Why do creators get a royalty on every transaction? I could understand if it was a performance, but for making a picture that seems weird.

[BriansHat]

This is important because it was part of the selling point for artists to embrace NFTs. The idea that if their artwork appreciates greatly in value in the future, they can continue to benefit from it, as opposed to physical art where the artist only receives the initial selling price.

[kerowo]

And nobody called them sweet summer children…

[goofy]

‘One of the Most Hated People in the World’: Sam Bankman-Fried’s 250 Pages of...

At the end of a 15,000-word Twitter thread he never posted, Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, offered a blunt assessment of his predicament.

“I’m broke and wearing an ankle monitor and one of the most hated people in the world,” he wrote. “There will probably never be anything I can do to make my lifetime impact net positive.”

He added: “And the truth is that I did what I thought was right.”

In several documents, Mr. Bankman-Fried blamed Caroline Ellison, his former girlfriend and onetime lieutenant, for helping to cause FTX’s implosion. He described her as ill equipped for the job he gave her as head of Alameda, claiming she had cried during a meeting with him and refused to institute trading strategies that would have protected his businesses from a market crash.

Yeah that will play great, blame it on the woman

[boredsocial]

Jesus Christ parents how strong are those brain chemicals? SBF’s parents are making unconditional love look pretty stupid lol. Like sure they’re obviously also psychopaths in hindsight, but this stuff is dumb. I can imagine having the part of yourself that makes you feel bad when you’re a piece of shit being missing (man does that sound nice!)… but the part that recognizes someone is being an unbelievable dumbass? Is wildly out of touch with reality?

[Jman220]

I still don’t understand why people like him don’t flee when they have the chance. He’s going to likely spend the rest of his life behind bars.

[grue]

IDK its not the 1980s, do prominent people flee somewhere and get away with it? Just polanski right? Only one I can think of and it was before then even.

edit oh yeah there’s the snowden route…

[TheDudeAbides]

lol effective altruism

[beetlejuice]

[goofy]

Dunno if this is related, but Levine on SBF today: the “Bankman” of “Bankman-Fried” is in some trouble!

In any case yesterday FTX’s bankruptcy estate sued Bankman-Fried’s parents, Stanford Law School professors Joseph Bankman and Barbara Fried, for, let’s say, being the knowing beneficiaries of FTX’s largesse. Here is the complaint. When FTX was cheerfully flinging around money on luxury housing and private jets and political donations and Super Bowl ads, Bankman and Fried allegedly got themselves some luxury housing:

On or about February 11, 2022, Bankman and Fried signed an agreement to purchase a $16.4 million 30,000 square-foot luxury property (for the two of them) with unobstructed ocean views in the Old Fort Bay community in The Bahamas, referred to as “Blue Water” or “Old Fort Bay.” … Neither Bankman nor Fried contributed any money of their own towards the purchase of Blue Water; rather, all of the funds were sourced from cash provided by the Debtors.

And private jets:

Bankman was richly rewarded for helping perpetuate the FTX Insiders’ fraud. He received millions of dollars in unearned “gifts” and real property, flew on privately-chartered jets, expensed $1,200 per night hotel stays to the FTX Group …

And political donations:

Fried served as the single most influential advisor regarding Bankman-Fried’s and the FTX Group’s political contributions, and repeatedly “dunned,” or called upon, Bankman-Fried and Singh to contribute millions of dollars directly to Mind the Gap, Inc. (“MTG”), a political action committee that she co-founded and for which she served as President and Chairwoman, or the organizations MTG supported.

And Super Bowl ads:

At his request, Bankman received a cameo appearance alongside Larry David in a now-infamous 2022 FTX Super Bowl commercial. Bankman pushed for his role in the commercial, stating bluntly, “OK, I’m not a starfucker and don’t really care about meeting, say, Tom Brady. But Larry David….”

And now the FTX bankruptcy estate wants the money back, basically on the theory that it was customer money and Bankman and Fried shouldn’t get to keep it.

But also on the theory that Bankman and Fried knew, or should have known, that it was customer money and not really on the up-and-up, that they were at least in some loose sense in on the scam. Part of the evidence for that is unfortunate-in-hindsight phrases: Fried “describ[ed] herself as her son Bankman-Fried’s ‘partner in crime of the noncriminal sort,’” oops oops oops oops oops. Also her academic work has some ironic titles:

Fried is a professor emerita of Stanford Law School and joined its faculty in 1987. Fried has published more than three dozen legal and academic writings, including pieces entitled “The Limits of Personal Responsibility” and “Beyond Blame.”

There’s a reason the complaint calls out those titles and not “Left Libertarianism: A Review Essay” or “Can Contractualism Save Us from Aggregation?” or “Begging the Question with Style: Anarchy, State and Utopia at Thirty Years.”

But part of the evidence is that, while Fried is a political philosopher and a theorist of not blaming people, Bankman is a tax professor and, apparently, a theorist of not paying taxes. And he seems to have been involved in the tax structuring of how to get money out of FTX:

In a January 2022 email exchange with Friedberg, Bankman-Fried, and others, Bankman proposed a series of possible non-taxable methods to structure a transfer of $10 million from the FTX Group to himself and Fried. In fact, Bankman proposed that, “[t]he easiest way is to add 10M to the 250M loan Sam has from Alameda. Then, Sam gifts the money. No current tax on either transaction. Eventually, Sam recognizes income when the loan is paid off or cancelled, at the dividend/capital gain rate, but that can happen in a year when he donates a lot, offsetting some or all of the tax.” …

Heeding Bankman’s advice, Friedberg agreed the $10 million gift should be papered as a loan to Bankman-Fried, and then be gifted to Bankman and Fried. Bankman-Fried could then transfer the “loaned” funds directly into an account belonging to Bankman and/or Fried. There is no indication that Bankman-Fried intended to repay the so-called loan. Indeed, both Bankman and Fried acknowledged that the $10 million payment to them was a gift, as indicated by an email from Bankman to Bankman-Fried, stating: “We are so touched by this gift. Mom is announcing retirement, which she would not have done otherwise.”

And in the structuring of how to keep the money out of FTX:

In November 2021 … Bankman began discussions about bankruptcy protection for the FTX Group. The General Counsel of Alameda and FTX Trading, in an email including Bankman, asked Law Firm-1 to schedule a call to discuss “how assets including primary residence can be structured to be bankruptcy-remote.” (Emphasis added)

The following day, Bankman initiated a discussion with Friedberg and General Counsel of Alameda and FTX Trading opining that, “[i]t would be great, all else equal, if we could, have the founders put money into property in the Bahamas,” included a link to https://www.offshorecompany.com/trusts/bahamas-asset-protection/, and sprang into action to find outside counsel to pursue this effort. After collecting viewpoints from a fellow Stanford Law School professor, local counsel in The Bahamas, and his brother-in-law, Bankman determined that an overseas asset protection trust was “something we might use when we buy property in the Bahamas,” but “the real issue is whether these things work in the US, and to what extent….”

Yeah look if you help run a crypto company that goes bankrupt and loses $8 billion of customer money, you don’t really want “https://www.offshorecompany.com/trusts/bahamas-asset-protection/” in your search history. Absolutely none of the words in that address sound good in this context. If you think that your exchange is going great and printing money and will never fail, and that there’s plenty of cash to lavish on personal expenses, then you probably don’t worry that much about keeping your assets bankruptcy-remote.

[boredsocial]

Honestly I’ve been expecting them to get arrested for a while. There’s more coming. SBF never gets off the ground without mom and dad, and I simply don’t believe they weren’t in on it to a significant extent. You can claim to be stupid or you can claim to be a genius and both of his parents have been trying pretty hard to seem like the latter their entire adult lives.

[McTrollson]

Ryan Brown 🎮 games industry guy (@toadsanime.bsky.social)

[Jman220]

I feel like this was inevitable. Always were tulips.

Also, paging @riverman