SBF on Odd Lots describing yield farming [1]. For context, this was before the FTX meltdown or any allegations about Alameda using FTX customer funds. Was honestly stunning to hear someone unintentionally explaining their business as a ponzi scheme.
This podcast episode blew a hole in my understanding of reality. First because of how plainly SBF explained crpyto as a ponzi with his "magic box" example, and then six months later when he was exposed for fraud.
>Was honestly stunning to hear someone unintentionally explaining their business as a ponzi scheme.
Technically he was describing tokens for a hypothetical dapp that had questionable/unproven value, whereas the business he ran (FTX) and the associated tokens (FTT) were straightforwardly profitable, but went bankrupt due to bad investments/trades.
Also the interviewer (Matt Levine) came away with a totally different conclusion from that interview:
>People on Twitter now are like “he admitted that FTX is a Ponzi!” but of course that’s not true. He conceded a certain validity to my claim that some crypto businesses — not his — are Ponzis. He is just in the business of trading their tokens.
>In fact, I came away from that conversation bullish on FTX and Bankman-Fried. My view was, and is, that if you talk to a crypto exchange operator and he is like “crypto is changing the world, your old-fashioned economics are just FUD, HODL,” then that’s bad. A wild-eyed crypto true believer is not the person to operate an exchange. The person you want operating an exchange is a clear-eyed trader. You want someone whose basic attitude to financial assets is, like, “if someone wants to buy and someone wants to sell, I will put them together and collect a fee.” You want someone whose perspective is driven by markets, not ideology, who cares about risk, not futurism. A certain cynicism about the products he is trading is probably healthy.
This was my take as well, and I dont know how people who listened to the interview get it so wrong.
He basically described how you can make transaction fees or arbitrage fees on others engaging in speculation.
A very dumbed down example would how the post office can make legitimate income on postage while someone else operates a Ponzi by mail schemes. Or for that matter, brokerages take commissions when people trade meme stocks and unprofitable companies every day.
[1] - https://podcasts.apple.com/us/podcast/sam-bankman-fried-and-...