Thread by @hasufl

Why do many hacks and rugpulls coincide with overall market downturns?

Same reason crime explodes in an economic depression.

People stop seeing the market as a long-term positive-sum game. Instead, they switch into survival mode, taking with force what the market „owes“ them.

For most people, this means making self-destructive moves, like using high leverage to „make it all back in one trade“.

Others are willing to take from other people - by force.

There are two important takeaways from this:

1) In theory, smart contracts allow us to build applications that require no trust in the developers.

In practice, there‘s a near endless number of governance apologists, telling you that this or that loophole is necessary.

But the reality is that opportunity makes the thief, and most hacks and rug pulls are insider jobs.

It doesn‘t matter if you can trust a founder today. Can you trust them at their lowest moment, when they see their project & future revenue swimming away?

In summary, today is a good day as any to join the club and start looking at any form of governance as an attack vector. Also, start looking at *complexity* as an attack vector.

Use projects that minimize governance-extractable value:
ournetwork.substack.com/p/our-network-…

2) The second point is about both yourself & the people you work with. Days like yesterday are extremely useful in one way:

They pull away the curtain and reveal how people react in a (perceived) crisis situation.

The stronger the crisis, the more you will learn about their ability to deal with high stress, and where they put their moral values/friendships/business agreements in relation to their own survival.

It‘s cliche, but you should play long-term games with long-term people.

If you can see yourself in any of these tweets, use the time to reflect. Allow the market to teach you a valuable lesson. Days like today are where you can compound weeks to months of wisdom in a single day, and grow all the stronger from it.