You are viewing a single comment's thread from:

RE: Prism Beta is Out

in #ethereum8 years ago

there is a mechanic going on behind the scenes that they are keeping very quiet about. I suspect this is because when you put your ether into the "smart contract" it really just goes into an account ShapeShift has control over. Shapeshift then allocates the funds based on your portfolio and then charges you a fee to withdraw (which they do at the beginning when you create the fund).

Bitshares has something similar when you create bitAssets, however those assets are backed by BTS and creating only makes sense if you are trying to sell the borrowed bitAsset which effectively becomes a short trade position. I short about 10-20% of my bitshares portfolio at all times against the USD.

My point is there is no such thing as a free lunch. If bitshares looses value I loose money, that's the risk I take by shorting the dollar. With prism the risk is that ShapeShift might not be around to send you your gains back, or they just might not do it. What legal obligation do they have?

Billing this as "trustless" with "no counterparty risk" is just plain dishonest.

Sort:  

I see your point and if all of what you say is right, that is not good at all. So you are saying that ShapeShift has a contract over my smart contract? Is there proof of this?

Look at my sources. Basically shapeshift is buying and holding your coins for you. There is a smart contract between you and shapeshift but if shapeshift goes under tmor just decides not to pay you you will get nothing because they physically own your coins.