More Liquidity Nightmares for FTX and BitDAO

Binance buys FTX: Updates on what it means for the crypto industry

Gracy Chen, managing director of Bitget, warns Binance may be “damaging the long-term interests of the industry”: “It’s highly unlikely that Binance will eventually succeed in acquiring FTX. It looks like CZ had a complete victory, but [Binance] will eventually pay the price for damaging the long-term interests of the industry … Acquiring FTX isn’t a valuable trade, and CZ’s goal is already achieved. Even if BN buys FTX, it’s [harmful] to industry and a humiliation to decentralization. For [Binance], it might be a short term victory written into a case study, but will backfire [Binance] in the long term.”

Some interesting details about BitDAO:

BitDAO in disarray after Alameda allegedly dumps BIT- Decoding details

Bitdao community is questioning the sudden dump of $bit token caused by Alameda dumping and breaching the 3 yr mutual no sale public commitment. Nothing is confirmed but bitdao community would like to confirm a proof of fund from Alameda.

As the "who did what why and when" unravels, that statement struck me as foundational. A financial product constructed out of algorithmic smart contracts is dependent upon off-chain agreements.

If "code is law", then those agreements should also be encoded and not rely on unenforceable paper contracts.

Also, defi should stop thinking of liquidity as purely an asset, as it is also a dependency and potentially a liability. Liquidity is not just a pool of funds but is also an important parameter in how such funds operate. I think this is yet another example of "naive defi" being found out - we really need better, much better, contracts and constructs.

Until such time as smart contracts are more robust, I would also not trust DAO governance to be anything more than an advisory role.