Stablecoins – Page 10

Backed By Facebook

Although the Libra Association is made up of 27 members, the most notorious member of the group is none other than Facebook – who revealed the project last year.

According to the Financial Times, The new stablecoin digital token Libra will be backed by the US Dollar and hopes to better the world of payments. It’s also reasonable to assume it will become a widely used payment option for advertisements run on Facebook, as well as Instagram.

Other noteworthy members of the Libra Association such as Visa have since ditched the project.

The Facebook-backed digital currency was meant to do more than it probably will when it launches, as financial regulators – especially those of European Union member states raised concerns about a stablecoin backed by one of the world’s largest corporations.

Fearing that Libra could erode financial stability across the globe, a torrent of backlash forced Facebook and its associates to scale back the project to its tentative current form.

Bruno Le Maire – the French Finance Minister – is one of the principal detractors of the project, arguing that Facebook has such a far-reaching influence all over the globe that allowing the cryptocurrency to be traded in the European Union would have serious consequences.

“All these concerns around libra are serious. So I want to say this with a lot of clarity: In these conditions, we cannot authorize the development of libra on European soil.”

It remains to be seen if Libra will now be allowed to launch within the European Union and worldwide in its scaled-back form. Even if it is, it will now have to compete with CBDCs being tentatively developed In China, Australia, the USA, and elsewhere.

Using the flashloan function made possible by smart contracts on the Ethereum blockchain, a coding genius lent 80 thousand ETH and made a profit in DAI worth around $6 million.

However, a total of 8 million was actually gained – but $2 million were returned.

A flashloan is an operation that – if executed properly – can net you some capital gains with virtually zero risks involved. When pulled off right, you get your money back within 15 seconds, plus your profit. All you need is dollars to cover the network fees with the coder himself taking no risk as the code either executes all in one with the ability to instantly return the borrowed money and fees, or it doesnt. Although hard to execute properly, a fair bit of practice can lead to a massive payoff.

In this case, the mysterious dev flashloaned 80,000 ETH – worth AUD 52,398,834 at the time of writing – and netted himself a profit of AUD 6,833,870, paying only $57 of gas fees for the transaction.

For this transaction, the mysterious entrepreneur spotted an arbitrage opportunity that took advantage of stablecoin mining pools – and exploited it using solidity flashloans.

Do You Really Know Flashloan?

The universe loves to punish hubris – and the coder behind the operation seems to have an eye for comedy.

A few days ago, the team behind the DeFi mining pool who bore the brunt of the transaction tweeted about how they are impervious to “flashloan attacks”.

The tweet has since been deleted – but thanks to the Wayback Machine – it’s been saved for posterity.

The tweet encouraged crypto enthusiasts to read on about how technical marvels make them one of the most secure DeFi firms in the industry.

However, there is always a bigger fish – and someone who apparently was more well-versed in technical details called their bluff. Clearly a humorous individual, the coding whiz left a taunting message on the transaction – “do you really know flashloan?”

The tongue-in-cheek antics then continued, with $2 million worth of the money returned to sender.

Many self-improvement blogs will tell you to work smart, not hard – but few took this old adage to heart as well as this individual.